The US has signed into law the Countering America's Adversaries Through Sanctions Act (CAATSA).

It targets Russia, Iran, and North Korea with new sanctions measures, and could have a significant impact on letter of credit (L/C) business with those countries.

Sector focus

The act places tougher sanctions on sectors already subject to limited sanctions, including the financial services, energy and hydrocarbon sectors.

It shortens some of the permissible debt maturity windows applicable to US entities involved with designated parties in the financial and energy sectors.

Impact on L/Cs

Debt maturity windows formerly 30 days are reduced to 14 days while those that were 90 days are now 30 days.

The directive applies to L/Cs as well as other financial instruments, including bonds, loans, extensions of credit, loan guarantees, drafts, bankers' acceptances, discount notes or bills and commercial paper.

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