The United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) has designated two Mexican business entities as Specially Designated Narcotics Trafficking Kingpins (“SDNTK”) under the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”). As a result of the designations the two entities in question, Arte y Diseno de Culiacan S.A. de C.V and Autotransportes Jym S.A. de C.V., have had any assets and/or property subject to U.S. jurisdiction frozen. In addition, United States persons are prohibited in engaging in transactions with these individuals.

The United States Department of the Treasury Office of Foreign Assets Control (OFAC) maintains a list of persons who they believe are engaged in activity detrimental to U.S. national security interests. This list is known as the Specially Designated Nationals (“SDN”) List. These persons can be either individuals or corporate entities and the evidence in support of OFAC’s decision is often unavailable to those who seek removal. Many times one finds themselves on the SDN list with no idea as to what they have done wrong.

The effect of these designations can be crippling. Not only will a designated person lose access to its assets under U.S. jurisdiction, they will also be denied access to the U.S. financial systems. Moreover, U.S. persons will not be able to engage in any sort of transaction with a person placed on the SDN list. The consequences of a U.S. person violating such a prohibition can have devasting consequences such as multi-million dollar fines and up to twenty years in imprisonment.

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.