Posts Tagged OFAC SDN Litigation

Al-Kuzbari Reconsideration Shows that Designated Syrians Can Be Removed from the SDN List

Given all that is going on in Syria these days, one might believe that those designated under the Syrian Sanctions program by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) have no chance of coming off of the List of Specially Designated Nationals and Blocked Persons (“SDN List”). The fact is that removal from the OFAC SDN List is always difficult/ This is particularly true in the case of a Syria designation. That said, removal is not impossible. Indeed, just last week a Syrian individual, Nabil Rafik Al-Kuzbari was removed from the OFAC SDN List. While details regarding what prompted OFAC to remove Al-Kuzbari from the SDN List are limited, it has been rumored that the reason underlying his removal from the SDN List was due to his leaving his position with a company owned and controlled by Rami Makhlouf, another designated Syrian national who is reported to have close ties to the Assad regime.

It’s important to keep in mind that OFAC designations are not meant as punitive measures. They are designed to compel a change in behavior of the parties they target. As such, if the rumors are true, then OFAC’s designations of Al-Kuzbari worked perfectly. Others on the OFAC SDN List who seek to be removed from that list would be wise to cut off any ties to other designated parties and present the information of those severed ties as soon as possible to OFAC. The issue then turns to one of getting OFAC’s attention and getting them to act, which is probably the most difficult task. OFAC is incredibly overburdened in all phases of its operations and has an extremely limited budget–around $30 million–despite the importance and breadth of its mission.

As such, to successfully contest any type of OFAC SDN designation, quickly file the request for reconsideration pursuant to 31 C.F.R. 501.807. This will get the reconsideration process moving with OFAC. Second, identify those relationships with other SDNs which may have lead OFAC to make the designation in the first place. Once those relationships are identified, steps should be taken to cut ties with those individuals and entities and provide information showing the severing of those relationships to OFAC. If it is a case of mistaken identity or an erroneous designation, it still makes sense to seek to cut off any potentially troublesome relationships or affiliations. Arguing with OFAC that they have it all wrong and that the designated party is completely innocent of any wrongdoing–whether true or not–will only leave the party seeking reconsideration mired in a back and forth with OFAC that will move slowly if at all. Keep in mind, OFAC feels very confident that the designations they make are based on credible information, or else they wouldn’t have made it. Whether they got it wrong or not is not the point. Showing them they are wrong will not get you very far, however, showing them that you have changed circumstances or done everything in your power to avoid engaging in any type of nefarious activity or other designated parties will be much more compelling to them. Reconsideration of OFAC SDN designations is very difficult, particularly when the designations are related to programs such as Syria, but they are not impossible. With the right counsel and the right frame of mind, even the most difficult designations can be removed.

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.

Bookmark and Share

, , , ,

Leave a comment