OFAC ALERT – OFAC Sanctions Guatemalan Officials

Gary E Davidson

Partner, Diaz Reus

On April 26, 2021, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) sanctioned the Chief of Staff for former president Alvaro Colom and an elected delegate to the Congress of the Republic of Guatemala, pursuant to the 2016 Global Magnitsky Human Rights Accountability Act (“GLOMAG”) and Executive Order (“E.O.”) 13818 of December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption.” Specifically, OFAC added these individuals to the list of Specially Designated Nationals and Blocked Persons (“SDN List”) for their alleged participation in the bribery of Guatemalan officials and other acts of corruption.

DRT Commentary 

Consequences of These Sanctions 

Pursuant to GLOMAG and E.O. 13818, the U.S. Government may sanction foreign persons believed to be involved in serious human rights abuse or corruption in a foreign country, as well as those who assist or provide material support, including goods and services, to the sanctioned persons or activities. These foreign persons are added to OFAC’s SDN List, and all of their property and interests in property, within or transiting U.S. jurisdiction or in the possession or control of U.S. persons, are categorically blocked and must be reported to OFAC. Additionally, unless authorized by a general or specific license issued by OFAC, U.S. persons or foreigners conducting business in U.S. territory, with U.S. persons, or using U.S. goods or services are prohibited from engaging in transactions with the sanctioned entities and individuals, as well as with entities in which the sanctioned parties have, directly or indirectly, 50% or greater ownership interest. Individuals and entities found to be in violation of OFAC sanctions, whether U.S. or foreign, will be exposed to significant civil and criminal penalties, and may themselves be added to OFAC’s SDN list through the enforcement of secondary sanctions.

Legal Options for Sanctioned Individuals and Entities 

Anyone placed on the SDN List by OFAC under GLOMAG has the right to seek removal under an administrative process known as “De-Listing.” To be removed, listed individuals and entities must file a written request with OFAC showing that an insufficient basis exists for OFAC’s sanctions, or that the circumstances resulting in OFAC’s sanctions no longer exist.

After a De-listing request is submitted, OFAC may request additional information before rendering a written decision. If the request for De-Listing is granted, the person’s name, along with related identifying information, are removed from the SDN List. And, if OFAC denies the De-Listing request, administrative remedies are deemed exhausted and listed individuals and entities can subsequently file a civil action with a U.S. District Court seeking judicial review of OFAC’s actions under the Administrative Procedure Act. In such a civil action, sanctioned individuals or entities may argue that OFAC’s action should be reversed on grounds that it was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.