On Thursday, The United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated several alleged leaders of the Lashkar-e-Tayyiba (LET) pursuant to Executive Order (E.O) 13224. Among those designated as Specially Designated Global Terrorists (SDGT) were Amir Hamza, Sajjid Mir, Abdullah Mujahid, Abdullah Muntazir, Talha Saeed, Qari Muhammed Yaqoob Sheikh, Hafiz Khalid Walid, and Ahmed Yaqub. As a result of these designations U.S. persons are prohibited from engaging in transactions with any of the aforementioned persons. These individuals are thought to be based in Pakistan and involved in LET’s propaganda campaigns, financial networks, and logistic support networks. In addition, several of the individuals targeted also served as military commanders directly responsible for the 2008 Mumbai attacks as well as attacks on coalition and Afghan forces.

E.O. 13224 was issued under President Bush shortly after the terrorist attacks of September 11, 2001. The regulations promulgated pursuant to E.O. 13224, known as the Global Terrorism Sanctions Regulations (GTSR), are codified at 31 C.F.R. Part 594. There have been a number of general licenses issued under the GTSR. Among these general licenses is one that may surprise some people. Much like the Iranian Transactions Regulations, the payment for legal services from unblocked sources is authorized. Under most OFAC sanctions programs payments for the provision of legal services require the issuance of a specific license. Indeed, even the general license authorization for provision of legal services states that payments must be specifically authorized, however, this changed when OFAC promulgated 31 C.F.R. 594.517 in late 2010. This general license for receipt of payment for authorized legal services still requires that the U.S. person providing the services submit a letter of engagement to OFAC and to submit quarterly reports to OFAC regarding the payment of fees and expenses.

The existence of 31 C.F.R. 594.517 gives those designated under E.O. 13224 an advantage over parties designated pursuant to other OFAC administered sanctions programs, because they are able to obtain counsel to help contest their OFAC SDGT designation faster. Since most counsel will not begin work on the reconsideration process until a retainer is in place, and most OFAC sanctions programs require the issuance of a specific license before receiving that retainer, there is usually a waiting period before the SDN reconsideration process can begin where counsel and the designated party are awaiting the issuance of the specific license. However, as noted above, such waiting period doesn’t apply in the reconsideration of SDGT designations because of the existence of 31 C.F.R. 594.517 and they can therefore proceed with contesting the designation immediately.

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.