Working with the Delaware Division of Corporations in Response to OFAC’s Russia Sanctions
Posted by Rose Redman
September 22, 2022
Earlier this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took sweeping action against Russia and its war efforts against Ukraine.
In addition to designating, or sanctioning, individuals and entities critical to the Russia’s ability to wage war, “OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, to any person located in the Russian Federation, pursuant to Executive Order (E.O.) 14071.”
To support OFAC’s efforts, the Delaware Division of Corporations flagged any entity in its database that showed a Russian address as a primary place of business or a director or officer with a Russian address. It then contacted each entity’s registered agent informing them that “all transactions with any person located in the Russian Federation are prohibited” and that “the entity had been blocked in [their] records.”
Entities and their registered agents were then given the opportunity to respond to this action should the entity be able to prove to the Delaware Division of Corporations that it had disconnected itself from Russia.
At Incserv, we believe that the Delaware Division of Corporations did the right thing in following through on OFAC’s actions. They identified entities, communicated clearly and gave those entities and their registered agents the opportunity to ensure compliance.
Proactively, we check all of our entities and all of our client contacts against the OFAC database. When onboarding a new client, we validate names, addresses and contact information. We also conduct that exercise on a quarterly basis because, in our opinion, that’s what a responsible registered agent does.