Ninth Circuit Denies Government’s Petition for Rehearing in Al Haramain

Yesterday, the Ninth Circuit Court of Appeals denied the government’s petition for rehearing in Al Haramain Islamic Foundation, Inc. v. United States Department of the Treasury. In doing so the Ninth Circuit made a few changes to the decision they had issued on September 23, 2011.

The first change was to delete the following language from the September 23, 2011 opinion: “In any event, we are puzzled by OFAC’s concerns related to the allegedly unknown location of the entity’s assets. In order to block assets effectively, OFAC must know which assets it is blocking.”

The second, and more notable change, came from the inclusion of a footnote to the slip opinion which stated that while OFAC has raised interesting arguments, that the Ninth Circuit does not and will not address them at this time. In coming to such a determination, the Ninth Circuit only sought to address the facts of the case; namely, the seizure of assets under U.S. jurisdiction of a U.S. entity, and not the Fourth Amendment requirements for designation of foreign parties or the warrant requirements for blocking subsequent designations of the targeted U.S. entity. However, the Ninth Circuit did state that a designation order does not need to specify all details of any potentially blockable asset to meet the Fourth Amendment particularity requirement.

The Ninth Circuit’s decision not only on appeal, but also on the petition for rehearing, constitutes a big win for the constitutional rights of those U.S. parties designated under OFAC administered sanctions programs. Regardless, it should be remembered that most of the parties who have been blocked by OFAC are foreign nationals and as such are not afforded constitutional rights. For most of these parties, the only real recourse lies in the administrative reconsideration process, a process that can take many years and can be a difficult undertaking.

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@ferrari-legal.com.