Tim O'Toole Discusses Russian Exit Taxes in Global Investigations Review
"'Go Home and Get Nothing': Western Companies Grapple With Russian Exit Taxes"
Global Investigations Review
Tim O'Toole commented on the Russian exit taxes imposed on Western company divestment deals. O'Toole said the U.S. Office of Foreign Assets Control (OFAC) has made it "much more complicated" for U.S. companies to leave Russia since the companies need to obtain an exit tax license from OFAC to avoid violating U.S. sanctions. He said many lawyers thought exit tax transactions would be covered by OFAC's General License 13E, however they are not. "I think there was a lot of surprise in the community" when OFAC said exit taxes wouldn't be covered, he said. O'Toole said the permit requirement would "likely" deter some companies from leaving the country given the cost of obtaining a permit. He called the policy on exit taxes "a little bit at odds" with the U.S.'s general message that companies should divest from Russia as soon as possible. O'Toole pointed out that OFAC has sped up the licensing process noting OFAC has "devoted a lot of resources to this issue in the licensing realm," adding that "licenses in this area are moving faster than in any other."