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OFAC gets new authority to combat illicit drug trade

The Treasury Department yesterday announced that President Biden has issued a new Executive Order, "Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade," to modernize the U.S. Department of the Treasury’s sanctions authorities used to combat the illicit drug trade. This E.O. will provide the Treasury Department with new tools to tackle changes in the global illicit drug trade that substantially contributed to over 100,000 American overdose deaths in the 12-month period ending in April 2021.

 

This E.O. enhances the Department of Treasury’s authorities to target any foreign person engaged in drug trafficking activities, regardless of whether they are linked to a specific kingpin or cartel. It further enables Treasury to sanction foreign persons who knowingly receive property that constitutes, or is derived from, proceeds of illicit drug trafficking activities.

 

Under the new E.O. OFAC has designated 25 actors (10 individuals and 15 entities) in four countries for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. For the names and identification information of the designated actors, and a link to the new Executive Order, see the December 15, 2021, BankersOnline OFAC Update.

 

As a result of yesterday’s action, all property and interests in property of the designated individuals that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.

 

Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or persons within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.

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