There’s an old saying that it’s better late than never. I guess this saying could apply to the case of former Chechen Rebel Shamil Salmanovich Basayev who, despite being killed on July 10, 2006 remained a Specially Designated Global Terrorist (SDGT) on the Specially Designated Nationals and Blocked Persons (SDN) List administered by the United States Department of the Treasury Office of Foreign Assets Control (OFAC) until today.

Basayev, a former Chechen Rebel, was designated as a SDGT on August 8, 2003. Since that time any assets belonging to him held under U.S. jurisdiction have been blocked and U.S. persons have been prevented from engaging in any transactions with him since his designation; and of course since his passing.

So the question remains why would OFAC keep someone on the SDN List who has been deceased for over five (5) years after they passed away. There are a few considerations which may explain the situation. First, a major intention of a sanctions designation is to deny access to the targeted party of those assets which were blocked pursuant to the designation. Even if the party is deceased, if their assets are immediately unblocked they may be inherited or divided among other parties affiliated with the targeted party which may be involved in activities contrary to U.S. national security interests. As such, it makes sense from a sanctions perspective to keep the designated person on the list until it can be determined what will become of their blocked assets following their removal from the OFAC SDN List.

Another consideration is that OFAC is so backlogged that it just doesn’t have time to review every designation for removal once that designated party passes away. Last time I heard, the Office of Global Targeting at OFAC only had around twenty-four (24) employees and most of those employees were focused on targeting persons for designation, not on removing designated parties. The lapse in time between the passing of Basayev and his removal from the OFAC SDN List is likely another sign that the agency is overworked, understaffed and under budgeted.

As evidenced by Basayev’s removal, OFAC removals take a long time. Those who have been designated erroneously or those with interests in the assets of deceased SDNs would be wise to move quickly and request reconsideration of their designation under 31 C.F.R. 501.807.

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.