Libyan Foreign Minister Moussa Koussa has been removed from the Office of Foreign Assets Control (OFAC) Specially Designated Nationals List……only after two weeks! As an attorney who handles quite a few OFAC SDN removal cases my feelings on this removal are mixed. On one hand, I was glad to see such a high profile OFAC SDN removed from the list; it gives hope to the thousands of others who have been targeted for sanctions that they can one day be removed. On the other hand, it is disturbing to see an OFAC SDN designation lifted so quickly merely because of the political influence of that person. There are numerous OFAC SDNs who languish on the SDN List for years as they fight for their removal. Those individuals and entities are forced to undergo the harsh consequences of U.S. sanctions, while working their way through OFAC’s very slow administrative reconsideration process. Mr. Koussa’s SDN removal shows exactly how politically driven the designation and removal process can be.

According to a Treasury Notes blog posting by Acting Undersecretary for Terrorism and Financial Intelligence, David Cohen, Koussa had severed ties with the Qadhafi regime following his placement on the OFAC SDN List. Cohen writes that, “One of the intended purposes of sanctions against senior officials in the Libyan government was to motivate individuals within the Qadhafi regime to make the right decision and disassociate themselves from Qadhafi and his government.”

Cohen, also correctly points out in his blog posting the power that economic sanctions have in influencing targeted parties to change their conduct. What was more interesting however, was, Cohen’s declaration that, “As we’ve said from the beginning, these sanctions are preventative and are not intended to be permanent.” It is unclear whether this statement was made in regards solely to the Libya Sanctions or for all sanctions. If it was meant as a policy position for all OFAC sanctions, then there might be some people who take issue with it. For example, Richard Chichakli, who was previously designated under the Liberia Sanctions for serving as the CFO for Viktor Bout, and who has continuously asked for removal from the OFAC SDN List but has been denied might take issue with Mr. Cohen’s statement.

Currently 13 senior Libyan government officials are on the OFAC SDN List, and Cohen has hinted that OFAC will be designating other officials in the coming days. Those seeking removal from the OFAC SDN List whose designation was based upon service to the Qadhafi regime may want to strike while the iron is hot and sever their ties with the Libyan regime and seek their removal while OFAC is in such a generous and expeditious mood. For those SDNs who were designated under a different program, the wait for removal may take many years until until finally resolved.

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.