Polar LNG, the startup planning a North Slope gas export terminal, said in an October 23 statement that it is seeking an OFAC license so it can acquire a half-built Russian gravity-based structure from Novatek. The disclosure came as its former chief executive, Joel Riddle, alleged in interviews with the FT and the NYT that Novatek had financed and directed the venture before any Treasury approval.
Where it stands: As of October 26, Treasury had not said whether it granted, denied or is still weighing the application, and no enforcement action involving the company had been made public.
Polar LNG rejects Riddle’s account. It called him a “disgruntled former employee” who had been terminated and said that “Development activities are being pursued in full compliance with applicable US laws.” Novatek said a deal of this size would need “requisite approvals” from both U.S. and Russian authorities and said its participation is not contingent on any sanctions easing. Tech Wave, the Emirati holding company above Polar LNG, denies that Novatek holds any equity in it, Business Standard reported.
For the full dispute, see our report on the allegations. This piece focuses on the license itself.
What Polar LNG Says It Asked OFAC For
According to the company statement carried by a Bloomberg wire story, the request is for permission “to purchase an unfinished gravity-based structure” from Novatek. Business Standard said the plan involves repurposing a partly built Novatek facility and moving it to Alaska.
Accounts differ on the scope of the request. The FT, as summarized by Ukrainska Pravda, reported that the company sought permission to negotiate with the Russian group and had yet to receive approval. Bloomberg’s account of the company statement describes a license to buy the structure. Neither account quotes the application itself, and Treasury has not described it.
The coverage reviewed does not say which sanctions provision Polar LNG believes the purchase touches. Novatek itself is under a debt-focused Treasury directive, while its Arctic LNG 2 operating company is fully blocked; our Novatek sanctions explainer sets out the difference.
How an OFAC License Works
Treasury’s licensing rules sit in 31 CFR 501.801. OFAC issues two kinds of authorization. General licenses are published and cover whole categories of activity. A specific license is a written approval issued to a named applicant for a particular deal.
The regulation is blunt about when one is required: a prohibited transaction that no general license covers “may be effected only under specific license.” Anyone with an interest in a proposed deal may apply. Applicants must “fully disclose the names of all parties” with a stake in the transaction, and OFAC can request more information before deciding.
| Step | What the rule says |
|---|---|
| Check general licenses | OFAC does not normally grant a specific license where a general one applies |
| File application | Signed, filed online or by mail, naming every interested party |
| Supply more information | OFAC may request additional details |
| Decision | License may carry reporting conditions |
| If denied | Applicant may seek reconsideration or reapply |
A denial is not final. The rule states that it “does not preclude the reconsideration of an application or the filing of a further application,” and an applicant can cite new facts or changed circumstances. Licenses that are granted can come with conditions, including reports on the authorized transactions. The regulation sets no deadline for OFAC to decide.
The blocking rules on Arctic LNG 2 show why licensing matters in this area. The State Department’s 2023 designation said dealings with blocked parties “are prohibited unless authorized by a general or specific license issued by OFAC or exempt,” according to the archived release.
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What IEEPA Says About Penalties
Russia sanctions imposed by executive order, including E.O. 13662 and E.O. 14024, draw on the International Emergency Economic Powers Act. Its penalty section, 50 U.S.C. 1705, makes it unlawful not only to breach the rules issued under that law but also to attempt or plot a breach, or to cause someone else’s. These are the ranges the statute allows; they say nothing about whether anyone in this story has done anything wrong.
The civil cap is the greater of $250,000 or twice the value of the transaction. Inflation adjustments have raised the dollar figure: OFAC’s January 15, 2025 rule set the IEEPA maximum at $377,700 per violation, according to the Federal Register. Criminal penalties apply only to willful conduct and run up to $1,000,000 in fines and, for individuals, up to 20 years in prison. Since a 2024 amendment, both civil and criminal cases must begin within 10 years of the latest violation.
OFAC’s Enforcement Guidelines shape real-world outcomes. In a non-egregious case a company discloses voluntarily, the starting point is half the transaction value, capped at $188,850 per violation. In an egregious case OFAC learns of on its own, the base is the statutory maximum. OFAC can also close a matter with no action, a cautionary letter or a Finding of Violation without any fine.
What Has Been Alleged, and Who Has Responded
Riddle told the NYT that the arrangement is “not only unlawful,” Raw Story reported. The NYT said memos from law firm Baker Botts noted that Treasury sanctions enforcers had flagged “potential Russia-related sanctions concerns.” Riddle said he and a pair of fellow executives who also quit pressed officials to look into it; the Energy Department did not answer the NYT’s questions. The paper said nothing suggested that Jared Kushner or Steve Witkoff, the Trump envoys who heard Putin discuss the Alaska plan, were aware of the company’s Novatek links.
Those statements are allegations and legal advice, not findings. Treasury told the FT: “While we do not comment on allegations of sanctions violations, we take potential violations extremely seriously.” The company is still targeting first Alaska gas shipments around the close of 2030, per its statement.
Frequently Asked Questions
What is an OFAC license?
It is written permission from Treasury’s sanctions office, OFAC, to carry out a transaction that sanctions rules would otherwise prohibit. General licenses cover broad categories and are published; specific licenses are issued to a named applicant for a particular transaction.
How long does OFAC take to decide a license application?
The licensing regulation, 31 CFR 501.801, sets no fixed deadline. OFAC can ask applicants for more information, and a denied applicant may request reconsideration or file again.
What are the penalties for violating U.S. sanctions under IEEPA?
Civil penalties can reach the greater of the inflation-adjusted cap, set at $377,700 per violation in January 2025, or twice the transaction value. Willful violations can bring criminal fines up to $1,000,000 and, for individuals, up to 20 years in prison.
Has OFAC approved Polar LNG’s license request?
No decision had been made public as of October 26. Treasury has not discussed the application publicly, and in response to the reports said only that it takes potential violations extremely seriously.
Sources
- Alaska LNG export terminal got funding from Russia’s sanctioned Novatek before US nod – FT report — ThePrint (Bloomberg wire), October 24, 2026
- Top executives quit $25 bn US gas project over alleged Russian control — Business Standard, October 25, 2026
- Russia secretly financed Alaska gas project — Ukrainska Pravda, October 24, 2026
- Former CEO: Russian Firm Backed Alaska Gas Venture — Newsmax via Yahoo News, October 24, 2026
- Whistleblower CEO quits over hidden Russian cash behind gas deal in Trump peace talks: NYT — Raw Story, October 24, 2026
- 31 CFR 501.801 – Licensing — Electronic Code of Federal Regulations, current as of October 2026
- Taking Additional Sweeping Measures Against Russia — U.S. Department of State (archived), November 2, 2023
- 50 U.S. Code 1705 – Penalties — Legal Information Institute, Cornell Law School, current as of October 2026
- Inflation Adjustment of Civil Monetary Penalties (Final Rule) — Office of Foreign Assets Control, Federal Register, January 15, 2025
- Appendix A to Part 501 – Economic Sanctions Enforcement Guidelines — Electronic Code of Federal Regulations, current as of October 2026
This article is news reporting and analysis based on the public sources listed above, as they stood on the dates shown. Where officials, lawmakers or analysts disagree, including on whether an action is lawful, their positions are attributed to them; Donald Trump Class Action is not a court and nothing here is legal advice. Facts in a developing story can change.