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ARTICLE · 26 MAY 2023

Exit Tax And Divestment From Russia

Lewis Brisbois Bisgaard & Smith LLP
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OFAC's new commitment to expedited processing for the Russian "exit tax" related OFAC license applications is a positive development...

United StatesTax
Michael Gnesin
Michael Gnesin
Jane Luxton
Jane Luxton
Andrew Pidgirsky
Andrew Pidgirsky
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Washington, D.C. (May 17, 2023) – On March 30, 2023, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) updated its FAQ 1118 regarding the payment and implementation of the Russian "exit tax" in connection with the divestment of assets from Russia and with respect to specific licenses required from OFAC for such transactions. Such transactions may potentially require dealings with the Central Bank of the Russian Federation or the Ministry of Finance of the Russian Federation, so closer scrutiny is warranted.

OFAC's new commitment to expedited processing for the Russian "exit tax" related OFAC license applications is a positive development, but the guidance still presents questions for U.S. persons seeking to divest their assets from Russia, particularly in cases where the Russian buyer has committed to pay the "exit tax."

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