8/6/2019 Sanctions Spree: Obama Issues Sanctions Against Criminal Organizations

1/2

1455 Pennsylvania Ave., NW

Suite 400

Washington, DC 20004

Tel. 202-280-6370

Fax. 877-448-4885

The Sanctions Spree: Obama Issues Sanctions AgainstCriminal Organizations

July 26, 2011

Yesterday, President Obama issued an executive order which imposes sanctions upon

transnational criminal organizations. Among those organizations targeted for sanctions are the

Brothers' Circle, Los Zetas, Yakuza, and Camorra. This is the third time this year President

Obama has imposed an entirely new category of sanctions. The first two sets of sanctions issued

by President Obama in 2011 targeted Libya and Syria respectively.

The Transnational Criminal Organization sanctions is a targeted sanctions program whichmeans that it targets specific organizations and could possibly be expanded in the future to

include individuals. Moreover, this new sanctions program is a blocking program. Therefore, any

transaction in which these organizations have an interest is automatically blocked. For example,

if some U.S. person was to export tires to Camorra and there was a funds transfer from Camorra

to that U.S. person, a U.S. bank would be obligated to blocked the transfer and place the funds

into an interest bearing account until such time as the blocked party was either no longer blocked

or no longer maintained an interest in the funds.

I guess the obvious question here, however, is what transnational criminal organization is

actually going to use its commonly known name? How many bank accounts in the U.S. are held

in the name of Los Zetas or Yakuza? Surely, OFAC will enforce the sanctions against U.S.persons who knowingly or should have known that their transactions would benefit one of these

designated organizations, however, how readily available is such information going to be to U.S.

persons?

Another question that came to mind when I initially looked at this executive order was

what constitutes a "significant transnational criminal organization"? As I read further, I found

that President Obama answered that question in Section 3(e) of the executive order. That section

defines a significant transnational criminal organization as one "that includes one or more

foreign persons; that engages in an ongoing pattern of serious criminal activity involving the

jurisdictions of at least two foreign states; and that threatens the national security, foreign

policy, or economy of the United States."

All I can is that I hope they are hiring over at OFAC. President Obama's penchant for

issuing sanctions has to be putting the agency under a tremendous amount of pressure in every

phase. New sanctions mean new questions for the compliance division; new licensing and

interpretative requests for the licensing division; more work investigating and penalizing in the

8/6/2019 Sanctions Spree: Obama Issues Sanctions Against Criminal Organizations

2/2

enforcement division; and more investigations into the activities of blocked parties and those that

support them for the designations investigations division. If you thought the current backlogs at

OFAC were bad, its my guess that they are only going to get worse.

The author of this article is Erich Ferrari, an attorney specializing in OFAC matters. If you have

any questions please contact him at 202-280-6370 orferrari@ferrari-legal.com.

mailto:ferrari@ferrari-legal.commailto:ferrari@ferrari-legal.commailto:ferrari@ferrari-legal.com