The U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”) has designated the WAAD Project, a Lebanese construction company under the control of Hezbollah, as a Specially Designated National (“SDN”) pursuant to Executive Order 13224 and the International Emergency Economic Powers Act.

According to OFAC, the WAAD Project was created following the implementation of a similar designation against another Hezbollah run construction company, Jihad al-Bina, in 2007. Since Jihad al-Bina’s designation in that year, it has become difficult for it to receive funds from its donors.

It is alleged that the WAAD Project has participated in such construction projects for Hezbollah as rebuilding its command headquarters in Beirut’s suburbs and Hezbollah’s underground weapons storage facilities.

If OFAC’s allegations are correct and the WAAD Project was set up as an alternative stream to garner incoming donations, then it seems that Treasury is involved in a perpetual game of cat and mouse with Hezbollah in its attempts to enforce these sanctions. This is to say that, OFAC designates one entity controlled by Hezbollah, only to have another one with a similar function arise. It seems to this author that the wiser course of action would be to expend U.S. resources tracking down the real cause of the problem: the donors. Of course, this is likely to prove more difficult given that a single individual may not leave behind as extensive a paper trail as an entire corporation.

For more information on the designation of the WAAD project please click here.

Section 1 of Executive Order 13224 blocks property and interests under the jurisdiction of the United States of persons listed as an SDN. In addition, any persons owned, controlled or acting on behalf of an SDN with property or interests under the jurisdiction of the United States may have those interests blocked.

Such interests can include bank accounts, real estate, and securities. An appeal to such blocking can be a costly and time consuming matter. As such, effective counsel should be sought out immediately if one believes that it might be blocked or an individual or entity it is involved with may be blocked.

If you feel that you may have violated any OFAC administered regulations or seek assistance in complying with those regulations please contact the author at 202-329-5652 or by email at ferrari@mcnabbassociates.com

The author of this blog is Erich C. Ferrari, an attorney in Washington, DC, who specializes in Sanctions Law and White Collar Criminal Defense. If you have any questions please email him at ferrari@mcnabbassociates.com