The Weekly Current

Settling charges that it violated U.S. sanctions against Russia, IPI Partners LLC will pay more than $11.4 million for permitting a business entity owned by the family trust of a Russian oligarch to invest in one of its equity funds in 2017. The oligarch was added to the Specially Designated Nationals List in 2018, and IPI continued the relationship after consulting legal counsel, as the oligarch himself did not own 50% or more of the investing business. OFAC nevertheless found IPI Partners at fault, alleging that the firm knew the original source of the funds was the oligarch himself.

These sanctions cover entities that are 50% or more owned by named Russian oligarchs. Given these requirements, ownership screening responsibilities can be challenging and are potentially set to become even more so.

Under the new BIS Affiliates Rule, any foreign entity that is 50% or more owned—directly or indirectly, individually or in aggregate—by one or more parties on certain lists is automatically subject to the same export restrictions as its owners, even if the entity itself is not specifically named on one of those lists. The new rule has been paused until November 2026 while global trade deals are negotiated.