The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a number of parties yesterday that they believe to be linked to the Taliban. The designated parties were blocked pursuant to Executive Order 13224 and include Haji Abdul Sattar Barakzai, Haji Khairullah Barakzai, Haji Khairullah Haji Sattar Barakzai Money Exchange, and Roshan Money Exchange. According to OFAC’s press release, these parties were involved in money exchange and transmission services on behalf of the Taliban. In addition to these designations there were a number of removals nineteen (19) individuals and entities designated pursuant to the Foreign Narcotics Trafficking Kingpin Designation Act (Kingpin Act).

Those seeking reconsideration of these types designations with no relationship with the U.S. may apply for administrative reconsideration pursuant to 31 C.F.R. 501.807. Those with some relationship with the U.S., either through immigration status, physical presence, or maintaining of accounts and/or property under U.S. jurisdiction, may bring a due process claim under the Fifth Amendment of the U.S. Constitution in U.S. federal court. While judicial review can be present in the aforementioned scenario it becomes very difficult to overturn the OFAC designation as the judiciary often gives great deference to the actions of the executive branch in matters of national security and foreign policy; an area which OFAC falls squarely into.

Yesterday’s designation is representative of a recent trend by OFAC of designating money exchangers, particularly those operating in the Middle East. As some readers of this blog may be aware, the use of money exchange houses is often the only way to transfer funds from certain sanctioned countries to the U.S. If this current trend continues the designation of money exchange houses throughout the Middle East might not only impact those they are alleged tied to, but may cut off some of the few remaining conduits through which funds are transferred from sanctioned countries to the U.S. for licensed transactions.

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.