OFAC OGT Gets Busy Removing Kingpins from SDN LIst
Today, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that they were removing 12 names from the OFAC List of Specially Designated Nationals and Blocked Persons (SDN List). A review of the names removed shows that they were mostly individuals or entities from Columbia that were designated as either Tier II Kingpins under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) or Executive Order 12978. The large scale removals of parties designated under the counter narcotics trafficking programs is fairly common. It’s not unusual to see tens of parties removed at once, as these programs are the most fluid of all OFAC administered sanctions programs. This means that there are a lot of names going on, and a lot of names coming off of the SDN List.
OFAC SDN designations made under the Kingpin Act are interesting for a number of reasons. First, they operate under a tiered program. There are two types of Kingpins, Tier I’s and Tier II’s. Tier I Kingpin designations come out every June 1st and are made at the direction of the President of the United States. These are the individuals, or their companies, who the U.S. government believes are the actual significant foreign narcotics traffickers. Tier II designations are placed upon those individuals or entities who are materially assisting the Tier I Kingpins. This comes in to play when seeking removal of a Kingpin designation, as the Tier I designations are much more difficult and lengthy cases. Another interesting thing about Kingpin SDN cases is that its difficult to get information concerning the basis of the designation. This is mostly due to the fact that Congress precluded information concerning these designations from being disclosed under the Freedom of Information Act (FOIA).
These interesting factors make contesting a Kingpin designation all the more challenging. This is also compounded by the fact that the same people at OFAC’s Office of Global Targeting (OGT) who designated the party are also responsible for reconsidering that designation. This makes the process of reconsideration hardly impartial. The good news in all of this, however, is that a Kingpin designation, particularly a Tier II designation, is much more likely to be removed than any other type of SDN designation due to the fluidity of the program. In the end, all OFAC SDN reconsideration cases are long and difficult, but armed with the right knowledge removing a Kingpin designation and getting off of the OFAC SDN List is not impossible. Indeed, I dare to say its eventually probable.
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.
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3 Comments
Erich — OFAC can also do their own Tier I Kingpin designations as a significant foreign narcotics trafficker (“SFNT”) — they don’t have to wait for the President to do the Tier I Kingpin before the annual June 1 deadline.
Take a look at the new Narcotics brochures where they point out the Treasury
designated Kingpins pursuant to § 1904(b)(4) are identified by an asterisk (“*”).
http://www.treasury.gov/resource-center/sanctions/Programs/Documents/narco_designations_kingpin.pdf
Tony,
Thanks for the info. The info I posted is based on the Judicial Review Commission Report from 2000, so I’m guessing, based on what you’ve said, that the procedure has changed since that report came out. Do you know which legal authority was issued to change it? Or was it an internal policy change? The document you cite to doesn’t refer to Tiers. It only refers to derivative designations. Also, what is the interplay between 1904(b)(4) and 103(b)(1), which is what the Judicial Review Commission Report states is the legal authority for a Tier I designation? I’m just trying to figure what the legal authority is that makes a designation under 1904(b)(4) a Tier I as opposed to a Tier II. Would be grateful if you could point me in the right direction.
Also, you mentioned an SFNT desigation. There doesn’ts seem to be an SFNT identifier anywhere on the OFAC SDN List. Has it been used? Or are you referring to an SDNT designation? Everything I have read or seen suggests that an SDNT designation is an EO 12978 designation under IEEPA and not a Kingpin designation. Would be great if you could cite to some legal authority. Thanks.
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