The United States announced sanctions Thursday targeting dozens of Russian banks, including Gazprombank, the largest remaining bank yet to face U.S. action, as part of its efforts to weaken Russia’s capacity to wage war on Ukraine. Gazprombank, a major conduit for Russia’s military finances, was among more than 50 internationally connected Russian banks sanctioned by the U.S. Treasury.

Almost 80 percent of Mongolia’s oil payments go through this bank. Therefore, the Ministry of Finance of Mongolia took urgent action and contacted the US Treasury Department to obtain a “COMFORT LETTER” from the US Treasury Department stating that oil payments from Mongolia are not subject to this.

Here is the “COMFORT LETTER” from the US Treasury Department:

“We understand that Mongolia is facing difficulties in making payments to Russia related to essential imports, particularly energy, and that Mongolian financial institutions (including the Bank of Mongolia) may rely on Gazprombank JSC and its six foreign subsidiaries noted above (collectively, “Gazprombank”) to make payments for energy, specifically crude oil, petroleum products, electricity, and natural gas. In light of Mongolia’s unique and challenging energy situation, its efforts to abide by U.S. sanctions, and the limited alternatives for obtaining and paying for energy, OFAC is providing this guidance that non-U.S. persons would not be exposed to U.S. sanctions under E.O. 14024 for transactions involving Gazprombank that are ordinarily incident and necessary to payments for crude oil, petroleum products, electricity, and natural gas for consumption within Mongolia. Non-U.S. financial institutions would not risk exposure to U.S. sanctions under E.O. 14024 for processing such payments involving Gazprombank. This guidance is valid until June 30, 2025.”