State and Treasury Split Duties in Designating New Individual and Entities to OFAC SDN List
December 14, 2012 Leave a comment
Yesterday, the United States Departments of State and of the Treasury designated a number of Iranian individuals and entities pursuant to Executive Order (E.O.) 13382. E.O. 13382 targets those parties involved in Iran’s proliferation of weapons of mass destruction activities. Once designated pursuant to this authority, any assets owned or controlled by the designated parties under U.S. jurisdiction are blocked. Moreover, U.S. persons are prohibited from engaging in most transactions with the designated parties. Under E.O. 13382, both the Treasury Department and the State Department have the authority to designate parties for sanctions. Treasury’s designations are administered through the Office of Foreign Assets Control (“OFAC”) who also maintain the list of Specially Designated Nationals and Blocked Persons (SDN List) in which these designated parties names will now appear.
OFAC designated the following individuals and entities: Fereidoun Abbasi-Davani, Morteza Ahmadali Behzad, Seyed Jaber Safdari, Aria Nikan Marine Industry, Iran Pooya, and Pouya Control (Tejarat Gostar Nikan Iranian Company). The State Department added the following designations: Amir Hossein Rahimyar, Mohammad Reza Rezvanianzadeh, Faratech, Neda Industrial Group, Tarh O Palayesh, and Towlid Abzar Boreshi Iran. All of these entities are alleged to have engaged in activities to further Iran’s nuclear proliferation efforts. In addition, these individuals and entities have also had designations under the Iranian Financial Sanctions Regulations placed upon them. This indicates that those foreign financial institutions who deal with these individuals and entities could be subject to secondary sanctions under the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA).
These individuals do have some recourse under OFAC’s regulations to contest their designation. There is an administrative reconsideration process that can be engaged in with the agency, however, it is often a long and burdensome process involving the production of significant documents and information to OFAC in order to prove that their evidentiary basis for making the designation is flawed. This is a task that becomes even more difficult because OFAC rarely provides any of the information that forms the basis of their designation, leaving the designated party to guess what OFAC’s basis is and to try to provide arguments and evidence to counter that. That said, designations do occur regularly and if any of these blocked parties believe they have been wrongly designated they should pursue such reconsideration.
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 firstname.lastname@example.org.