Today, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced the designation of six (6) individuals and four (4) entities belonging to the Brothers’ Circle, an alleged international criminal organization operating in the Middle East, Africa, and the Americas. OFAC’s designation, made pursuant to Executive Order (E.O.) 13581 and the International Emergency Economic Powers Act (IEEPA), prohibits most dealings by U.S. persons with these designated parties, and blocks any accounts or assets in which they may hold an interest that falls under U.S. jurisdiction. OFAC has provided a chart of those currently designated pursuant to E.O. 13581, otherwise known as the Transnational Criminal Organizations (TCO) Sanctions. That chart can be accessed here.

Parties designated for sanctions can avail themselves of the administrative reconsideration process contained in 31 C.F.R. 501.807. That regulation allows for parties which have been designated to submit evidence and arguments as to why the designation should be rescinded. In order to rescind the designation, OFAC must be convinced that either: 1) the designation was a case of mistaken identity or made in error; or 2) the circumstances which served as the basis of the designation have changed to such an extent that the original designation is no longer warranted. The process for contesting these OFAC SDN designations is long and time consuming. In addition to having to provide OFAC with a copious amount of information, it also takes OFAC quite a long time to decide whether or not to remove a party from the Specially Designated Nationals and Blocked Persons List (SDN List).

The TCO sanctions have interested me ever since E.O. 13581 was released in July of 2011. Typically OFAC sanctions follow developments in U.S. foreign policy. For example, there is a political conflict in a country which is leading to human rights abuses against the citizens of that country, the U.S. steps in by imposing sanctions against the country or certain members of the government of that country. However, the TCO sanctions are a departure away from that. Essentially, OFAC is now serving as the world police by sanctioning those parties engaged in international organized crime, with seemingly little nexus to U.S. national security or foreign policy interests, other than the fact that crime is bad and therefore against the interests of the United States. This program will be an interesting one to watch. First, it is quietly being utilized more and more. Second, it’s an OFAC sanctions program that can last in perpetuity since it is not in direct relation to any particular international crisis or contemporary geo-political event. As such, the designations under the TCO sanctions will keep coming, but whether those designated under it seek to fight it or not is another question.

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.