On October 10, 2019, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) designated Ajay Gupta, Atul Gupta, Rajesh Gupta, and Salim Essa of South Africa (“the Guptas”) as Specially Designated Nationals (“SDNs”). The Guptas and their business associate, Essa, were designated in connection with their involvement in corruption under Executive Order 13818 (“EO 13818”), which implements and expands upon the sanctions authorities set out in the Global Magnitsky Human Rights Accountability Act. The designation of the Guptas and Essa as SDNs represents one of the most high-profile applications of the corruption-related sanctions provision of EO 13818 to date.

OFAC stated that the Guptas and Essa were members of a significant corruption network that leveraged overpayments on government contracts, bribery, and other corrupt acts to influence actions taken by the government of South Africa, in particular by facilitating their capture of government contracts and misappropriation of state assets. As a result of their designation as SDNs, all four individuals’ property and the property of any entities that are owned 50 percent or more by them, which are in the United States or in the possession or control of a US person, are now blocked.

The South African Department of Justice (“SA DOJ”) released a positive media statement in response to the OFAC designations, noting their long history of cooperation with United States law enforcement agencies. SA DOJ similarly confirmed having expedited attempts to extradite the Guptas to South Africa, where they are yet to face criminal charges. The Guptas have allegedly been based in the United Arab Emirates since being forced to close their businesses in South Africa.

Author

Ms. Contini focuses her practice on export controls, trade sanctions, and anti-boycott laws. This includes advising US and multinational companies on trade compliance programs, risk assessments, licensing, review of proposed transactions and enforcement matters. Ms. Contini works regularly with companies across a wide range of industries, including the pharmaceutical/medical device, oil and gas, and nuclear sectors.

Author

Darryl Bernstein is a partner and head of Baker McKenzie's Dispute Resolution Practice Group in Johannesburg, where he advises on the resolution of complex commercial disputes, regulatory compliance and investigations as well as contentious and non-contentious communications, media, privacy and technology matters.

Author

Ms. Test advices clients on issues relating to licensing, regulatory interpretations, enforcement actions, internal investigations and compliance audits, as well as the design, implementation and administration of compliance programs. She also advises clients on the extra-territorial application of trade compliance-related regulations in cross-border transactions.

Author

Daniel Andreeff’s practice focuses on US economic and trade sanctions, including those targeting Iran, Russia, Cuba, Syria, and North Korea, export controls, and anti-boycott laws. He represents clients in national security reviews before the Committee on Foreign Investment in the United States (CFIUS), and has experience in federal court litigation and congressional investigations. His pro bono practice includes providing sanctions and export control advice to a global humanitarian NGO. * Admitted in New York only. Practice in the District of Columbia is under the supervision of a member of the District of Columbia Bar.