The US wants to seize yachts and jets from Russian oligarchs. This is what it means for banks with multimillion-dollar loans against them.
International Trade attorney Antonia Tzinova spoke with Business Insider for its article discussing the seizure of yachts and private jets from Russia's oligarchs and how banks that have an interest in these and other collateralized assets owned by a sanctioned individual get caught up in regulatory actions. While a bank can't extend a new loan to a sanctioned individual, the sanctions also apply to existing loans with clients who are new to the specially designated national (SDN) registry. Specifically, Ms. Tzinova told the publication that the sanctions are highly restrictive and it's unclear whether a U.S. bank could even receive payments on an extended loan.
"Banks cannot in any way restructure the loan with respect to the designated person to allow for some sort of resolution," she said. "So at this point, they have to turn to the collateral. Whether they can move on the collateral and possess it depends on the specific terms of the existing loan. They may even need to obtain a license from OFAC in order to move on the collateral."