No matter how many times I go to Dubai, I am constantly dazzled by its architecture, its diversity,……and the fact that there is so much activity going on which is potentially sanctionable under programs administered by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). This past week was no different. For example, it always make me smirk to see the Bank Saderat Iran (“BSI”) branch on Sheik Abu Zayed Road about 4 blocks away from Citibank; although I will say that on this trip the BSI branch looked fairly desolate, however, that may have been because of the haze outside due to a sandstorm that had blown in from Saudi Arabia.

With its general emphasis on business and trade and its geographical proximity to Iran and a number of other regions which OFAC frequently seeks to imposes sanctions on certain targets, Dubai truly must be high priority on OFAC’s radar with money exchanges houses, international banks, and trading companies in every direction you look. And while U.A.E. entities aren’t necessarily subject to OFAC administered sanctions, their activities could possibly land them in hot water with OFAC if those activities are prohibited and pass through the U.S. financial system or are related to some activity which would lead to a designation on the OFAC List of Specially Designated Nationals and Blocked Persons.

In particular, I kept think about the Foreign Sanctions Evaders Executive Order that was issued earlier this year and how OFAC could target a number of individuals and entities under such a program, particularly in a city like Dubai. As such, entities based in Dubai, perhaps more than any other city outside of the U.S., need to consider OFAC compliance as a major component of their business operations. This is not only so that they can stave off potential enforcement actions by OFAC; but also as a prophylactic measure to help protect against future designations under the Foreign Sanctions Evaders program. With all the potential OFAC work in Dubai, I started to think maybe its time for a move. Alas, I would miss my daily walks by the Treasury Annex building too much….plus the sandstorms and heat leave much to be desired.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.