The United States Department of the Treasury Office of Foreign Assets Control (“OFAC”), in a move aimed at both suspected narcotics traffickers and the media wing of Hamas, has designated a number of individuals under both the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”) and the Global Terrorism Sanctions Regulations (“Terrorism Sanctions”).

The first move, aimed at associates of alleged Columbian drug lord Daniel Rendon Herrera (a/k/a Don Mario), resulted in the designation of 15 individuals and 8 entities. According to a press release from the Department of the Treasury, the designations targeted key members of Daniel Rendon Herrera’s alleged drug trafficking organization.  OFAC also targeted leaders of criminal groups, known as Bandas Criminales, or BACRIM, that they believed to be associated with Daniel Rendon Herrera.  These groups are suspected of operating in specific zones of control throughout Colombia and are involved in everything from drug trafficking to money laundering to assassinations.

Treasury has also targeted companies controlled by members of the Rendon Herrera organization, including a number of private security companies, auto dealerships, and vehicle repair shops.

Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties.  Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million.  Criminal fines for corporations may reach $10 million.

OFAC’s second move was aimed at Gaza based businesses and a television station, Al-Aqsa Television, which is tied to Hamas. Al-Aqsa TV’s former former drector is currently the Hamas interior minister in Gaza, in addition to being a former senior member of Hamas’s military wing in Gaza, and as of 2007, was a member of the Hamas Shura Council.

Amongst the desginees was also the Islamic National Bank (INB) of Gaza alleged to be controlled by Hamas and providing financial services to Hamas members and employees, including members of the organization’s military wing.  According to Treasury, both the board of directors and INB’s senior management are comprised of prominent Hamas activists.

The bad news for those designated is that they have lost access to their assets under U.S. jurisdiction and access to the U.S. financial system. Also, U.S. persons can no longer engage in transactions with any of these individuals. Finally, they are stuck with the stigma of being considered either a narcotics kingpin or a terrorist. Pretty bleak picture. However, there is some moderately good news. These designations can be removed if contested properly. The regulations provide for the request of a reconsideration of OFAC’s actions. However, these can be complicated and require a pro active approach by the designee. For more information on the removal process click here.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.