I recently wrote about two diamond mining companies, Mbada Diamonds and Marange Resources, that were placed on the list of Specially Designated Nationals and Blocked Persons (SDN List) administered by the United States Department of the Treasury Office of Foreign Assets Control (OFAC). Spokesmen for these companies have recently come out to state that they do not believe the designations will impact their operations or sales.

Despite the designation, which prohibits U.S. persons from dealing with these companies, Mbada Diamonds mining manager, Mr Gerald Sithole, has stated that their operation has nothing to do with the West and will therefore not be negatively impacted by their placement on the SDN List.

Both Mbada Diamonds and Marange Resources work in conjunction with the Zimbabwe Mining Development Corporation, another designated party on the OFAC SDN List. However, not all companies working with the Zimbabwe Mining Development Corporation have also been designated. For example, Anjin Investment has been working with the Zimbabwe Mining Development Corporation for some time and yet has been allowed to sell its diamonds. Moreover, one of the directors of Anjin Investments, Mr Munyaradzi Machacha, has stated the sanctions which have been imposed upon others are unnecessary and undeserved.

Obert Mpofu, the Zimbabwean Mines and Mining Development Minister, has previously claimed that Zimbabwe would become an economic giant once their diamonds were approved by the Kimberley Process and that they would not longer have to request foreign funding.

OFAC has designated hundreds of individuals and companies over the last year alone. In addition, there are thousands of designated persons on the SDN List. Due to the low burden of proof for a designation, mistakes can happen. If you are on the SDN List, and you are unsure as to why your name is on that list, then you need to challenge that designation before great harm comes to your financial well being and your reputation. There are ways to do this, but it is a long and complicated process. You should consult with legal counsel who has both engaged in the reconsideration process before and understands how OFAC works.

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.