The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has clarified that U.S. companies facing an exit tax when selling a business in Russia must obtain permission from government officials before completing any such payment. This clarification follows coverage by RIA News on the licensing requirements tied to these cross-border settlements. U.S. entities planning a divestiture from Russian assets are now reminded that tax-related exits are subject to formal licensing rather than automatic approval, according to OFAC’s guidance.
OFAC explained that U.S. persons who would incur an exit tax upon departing from the Russian Federation need to secure a special license from the agency. The statement underscores that all payments connected to an exit tax fall under OFAC licensing rules, and ordinary licenses typically do not automatically cover these specific cash flows. The agency’s wording signals that these transactions require careful compliance review and an explicit authorization to proceed, ensuring alignment with current sanctions frameworks.
The challenge stems from the overlap between Russian requirements for foreign companies to pay an exit tax and U.S. sanctions prohibiting certain payments. Specifically, transactions involving the Central Bank of Russia, the National Welfare Fund, and the Ministry of Internal Affairs may be restricted, even when those funds would be used to satisfy an exit tax obligation. In practice, this means that both direct payments and related indirect transactions may require separate authorization before any deduction can be processed. This nuance is not automatically covered by existing licenses or Washington directives, creating a potential compliance gap for entities navigating the Russia-related exit process.
On February 24, Russian President Vladimir Putin announced a decision to conduct a special military operation in Ukraine in response to requests for assistance from the heads of the LPR and DPR. That move set in motion a broader set of retaliatory actions by Russia and a coordinated sanctions response from the United States and its allies. Businesses and financial institutions operating in or with Russian counterparts have since faced a tightening of permission regimes, including measures that affect cash movements tied to corporate exits. In this context, OFAC’s licensing requirement for exit tax payments serves as a reminder that sanctions administration remains dynamic and highly prescriptive, with authorities concentrating on preventing evasion and preserving the integrity of financial controls.