The interests of large business give US sanctions policy a special flavor. Any of us may find ourselves subject to sanctions even if the law does not require it.
Unfortunate misunderstanding
Although the US has not officially imposed sanctions against Ukraine, these sanctions are practically in effect. About 1 million Ukrainians living in the Zaporozhye and Donetsk regions controlled by the Ukrainian government cannot use international payment systems: SWIFT, Western Union, Monigram, RIA. But the services of the Ukrainian banking system are available to these people. This situation covers an area of 8,500 square miles, which is comparable in size with the State of New Jersey.
The problem arose at the end of 2022, when the EU adopted the 8th package of sanctions against Russia. The Ukrainian press wrote about this. (1) Sanctions operate on a territorial basis. People registered in the Ukrainian part of the Donetsk and Zaporozhye regions cannot use international payment systems anywhere. For example, if a citizen of Ukraine registered in the city of Kramatorsk, Donetsk region, comes to the city of Lviv, Lviv region, then he will not be able to use international payment systems. The address in the passport has become a curse for many people!
However, even by May 2024 the problem was not resolved. The author of these lines was unable to receive his fee from the USA for the article published in the American magazine OFFGRID Issue #61. This happened 09/05/24. My SWIFT payment was not processed by the system. Mary Mendence accountant CMG West LLC, the company that made the payment, told me: "It has to do with your location and sending money to your region. It is not allowed by OFAC." (2) The payment was blocked by Wells Fargo Bank, which acted in accordance with OFAC instructions. The bank employees did not ask me for any information. They simply blocked the payment.
I am a citizen of Ukraine and live in the city of Kramatorsk, Donetsk region. This city is the administrative center of that part of the Donetsk region that is controlled by the Ukrainian government. Since the first day of the war, I have been reporting about my life in the war for the American newspaper Red Hook Daily Catch. (3) For this work, I was nominated for the 2023 Pulitzer Prize in the category "Best Foreign Reporting." After such a background, finding yourself under American sanctions seems unthinkable. But it happened!
Correspondence with OFAC
Trying to understand the situation, I contacted OFAC. This is the correspondence. (4)
My letter:
"Hello. My name is Pavel Kulyuk, I am a Ukrainian journalist and Pulitzer Prize nominee. I have Ukrainian citizenship. I live in the city of Kramatorsk Donetsk region of Ukraine. This territory is controlled by the Ukrainian government.
"For me, on 09/05/24, CMG West LLC sent a SWIFT payment in the amount of $... The payment was made through Wells Fargo Bank. As reported Mary Mendence accountant CMG West LLC this payment was blocked at the direction of OFAC. What's happening? OFAC blocks sending SWIFT to Ukrainian citizens who live in territory controlled by the Ukrainian government? Why? It's like sanctions that don't work well. I hope to receive your answer to what is happening. I am ready to provide any documents you are interested in. With respect and sincerity, Pavel."
OFAC Response:
"Thank you for your email. OFAC does not stop, seize, or hold funds. Financial institutions stop to investigate and release, reject, or block transactions or accounts pursuant to U.S. sanctions regulations.
"If the name or identifying information of a party to your transaction is similar to that of an individual or entity on OFAC's SDN List or other sanctioned jurisdiction or activity, please be prepared to provide your financial institution with additional information to support your claim that the person involved in your activities is not the blocked individual or entity listed on one of OFAC's sanctions list or that the activity is not prohibited by OFAC sanctions.
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