Shortly after Thanksgiving I wrote a blog posting calling into question when the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) would designate members of the Congolese rebel group M23. In that posting, I stated that the tools were available under current U.S. economic sanctions programs to designate those parties involved in impeding the disarmament and reintegration of armed militias and foreign forces in the Eastern Congo. In typical OFAC fashion, it took a little longer than expected, but yesterday two M23 leaders, Baudoin Ngaruye and Innocent Kaina, pursuant to Executive Order (E.O.) 13413. The designations were a result of their involvement in recruiting child soldiers and impeding the disarmament of combatants in the Congo. Both of these designated individuals have already been sanctioned by the United Nations (“UN”). In addition, the UN High Commissioner for Human Rights has condemned the human rights abuses of the M23.

As readers of this blog will know, those designated pursuant to OFAC administered sanctions programs are prohibited from engaging in almost all transactions with U.S. persons and any assets coming under U.S. jurisdiction which are owned or controlled by the designated parties are to be blocked (i.e., placed in to a separate interest bearing account where no transactions can take place in relation to the assets unless authorized by OFAC). There is an administrative reconsideration process under which designated parties can contest their designations. In order to successfully challenge such a designation, however, the designated party must show that a case of mistaken identity is involved or the circumstances have changed to such a degree that the designation is no longer warranted.

From my personal experience, it seems questionable whether or not the concept of “changed circumstances” is sincere. There have been numerous occasions where either former or current government officials have stated to practitioners in this area that certain parties are never coming off the list. While I personally have never been told this, I have heard stories of OFAC and Department of State officials stating that certain parties will not be removed from the list despite changed circumstances. Indeed, it seems that a third, unstated criteria for removal from the OFAC Specially Designated Nationals and Blocked Persons List (“SDN List”) seems to be involved in the reconsideration process; namely, that the contemporary political environment is appropriate for a removal. Previously on this blog, my policy adviser, Samuel Cutler, indicated that sanctions designations are often used as “strategic communications”. This is very true. I would take it a step further and state that in many scenarios sanctions removals can also be strategic communications, and that removal of a particular designated party could send the wrong message politically if it were to occur at the wrong time. As such, any OFAC SDN reconsideration petition should include extensive policy arguments which address the significance (or insignificance) of a removal in the contemporary political environment. As with with most things in life, timing is everything.

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@ferrariassociatespc.com.