Moscow Exchange is developing a robust legal strategy to confront U.S. sanctions.
Moscow Exchange has not been idling since the United States imposed sanctions on it in June. They are preparing to respond by fighting back.
The Investor Rights Defense Club asserts that the Exchange, with the assistance of its legal consultants at Step Forward, has several legal strategies at its disposal.
A representative from Step Forward presented the strategy to the Investor Protection Club during a meeting on August 19. They intend to engage in a direct confrontation with the U.S. Office of Foreign Assets Control (OFAC).
A component of their strategy involves directly contacting OFAC to obtain information regarding the utilization of general licenses to unlock assets.
The drama commenced on June 12, when OFAC imposed sanctions on the Moscow Exchange and its affiliates, the National Clearing Center (NCC) and the National Settlement Depository (NSD).
Even though OFAC granted a license to conclude operations with these entities until August 13, they ultimately decided to extend it until October 12. Yes, as if that will alleviate Moscow’s difficulties.
The United Kingdom was eager to participate in the action and promptly sanctioned the same Moscow Exchange, NSD, and NCC the following day.
The UK’s Office for Financial Sanctions Implementation (OFSI) has authorized the unblocking of assets held through NSD; however, this authorization is valid only until October 12. Everyone is aware that it is an impending time bomb.
When it comes to unblocking assets in NSD accounts, they are not automatically adhering to U.S. and UK sanctions.
However, refrain from becoming excessively enthusiastic at this time. Euroclear and Clearstream, the dominant players in this industry, may still request U.S. or UK licenses if the assets in question are associated with their jurisdictions, whether through issuer or currency.
The key to unlocking assets lodged in NCC accounts with major U.S. institutions such as JP Morgan Chase and BNY Mellon may be OFAC’s license, which is valid until October 12. However, there is a caveat.
Based on Delcredere’s analysis, these American institutions are essentially expressing, “I apologize, but I am not sorry.” This game is exclusively available to American entities. But the legal staff is not about to allow Moscow to remain in the cold.
The representative of Step Forward offered some guidance: if you have assets that are entangled in this situation, it may be beneficial to engage in direct communication with JP Morgan Chase and BNY Mellon. The objective is to determine whether it is feasible to relocate assets under General License 100A.
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