On September 9, 2019, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued Executive Order 13886 (“EO 13886”), expanding the US counter-terrorism sanctions program by amending Executive Order 13224 (“EO 13224”), which dates to the aftermath of the 9/11 terrorist attacks. OFAC also designated 28 individuals and entities as Specially Designated Global Terrorists (“SDGTs”) under this new authority and updated various other entries on the Specially Designated Nationals and Blocked Persons List to reflect sanction of those authorities under the same authority. In addition, as described in statements here and here, the State Department implemented the new authority by designating Hurras al-Din, an al-Qaeda-affiliated group in Syria, and 12 leaders of SDGT groups (all of which were designated by OFAC on the same day).

The amendments to EO 13224 provide additional authorities for designation of non-US entities and individuals as SDGTs if, among other conduct, they:

  • attempt to commit acts of terrorism,
  • participate in training to commit such acts,
  • are leaders of designated terrorist organizations, or
  • own or control an SDGT.

EO 13224 also now authorizes correspondent account or payable-through account sanctions against non-US financial institution determined to have knowingly conducted or facilitated any significant transactions on behalf of an SDGT.

This amendment has the effect of expanding OFAC’s authority to impose correspondent account and payable-through account sanctions on non-US financial institutions to reach involvement in transactions relating to a potentially much wider range of terrorism-related activities and dealings with SDGTs. Prior correspondent account and payable-through account sanctions administered by OFAC were limited to transactions involving terrorism-related activities with a nexus to a specific country or entity, or involving non terrorism-related activities such as the Iranian Financial Sanctions Regulations, Hizballah Financial Sanctions Regulations, and the North Korea Sanctions Regulations.

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.

Author

Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Compliance and Investigations Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.