Last week, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the designation of 17 alleged leaders and associates of Los Urabeños. Effective immediately, all property and interests in property belonging to the designated persons located in the United States or in the possession of U.S. persons located anywhere must be blocked. Additionally, all U.S. persons, including U.S. businesses and companies operating overseas, are generally prohibited from transacting with the persons designated today.
The individuals specifically targeted by OFAC are:
- Rafael Alvarez Pineda;
- Cesar Daniel Anaya Martinez;
- Jairo de Jesus Durango Restrepo
- Orlando Gutierrez Rendon;
- Henry de Jesus Lopez Londono;
- Aristides Manuel Mesa Paez;
- Alexander Montoya Usuga;
- Carlos Antonio Moreno Tuberquia;
- Luis Orlando Padierna Pena;
- Cipriam Manuel Palencia Gonzalez;
- Carlos Jose Robayo Escobar;
- Hector Mario Urdinola;
- Arley Usaga Torres;
- Carrera Variedades Britney;
- Greilyn Fernando Varon Cadena;
- Ingrid Edith Varon Cadena; and
- Maribel Varon Cadena.
Entities designated pursuant to OFAC’s action include:
- H Y J Comercializadora LTDA;
- Comercializadora J Durango;
- Inmobiliaria Fer Cadena;
- Joyeria Manuella H.M.; and
- Litografia Varon.
The impact of these sanctions will likely frustrate both the legitimate and illicit activities of the newly designated people and entities. According to OFAC Director Adam Szubin, Los Urabeños is a “growing network of subordinate criminal groups engaged in activities ranging from money laundering to drug and weapons trafficking.” Thus, “today’s action strikes a first blow against the leaders of this powerful criminal organization.”
The people and entities identified by OFAC will find it difficult to liquidate and move their assets in the legitimate financial system. Most of them, even those who are not involved in narcotics trafficking (e.g., unlisted senior employees of the designated entities) will likely face problems when opening bank accounts, moving money, using credit cards, or undertaking any other mundane task that involves the financial system. From my prior experience working on SDN Removal cases, I have seen people lose their legitimate jobs with U.S. companies because of such designations.
Designations made pursuant to the Foreign Narcotics Kingpin Designation Act (KDA), 21 U.S.C. Sections 1901-1908, are more stringent than a lot of other sanctions authorities. Unlike the International Emergency Economic Power Act, the KDA has no statutory exemptions for travel, personal communications, or the transfer of information. Thus, it is not surprising that the regulations promulgated pursuant to the KDA. 31 C.F.R. Part 598, only contain the most minimal of general licenses (e.g., legal services and certain transactions related to maintaining blocked accounts).
As a newer statute, the KDA also mandates that the Justice Department, Central Intelligence Agency, and Treasury Department coordinate their efforts in designating suspected foreign narcotics traffickers, their networks, and supporters. Given the unprecedented disclosures made by former-NSA contractor Edward Snowden, it is likely that KDA designations are supported by information obtained through covert internet and communications monitoring. Given the often opaque nature of processing an SDN Removal, a designee will likely never know the true extent of the evidence against him or her.
Disclaimer: Blog posts should not be relied upon as legal advice and are only provided for informational purposes. Information contained in blog posts may also become outdated with the passage of time as laws change and U.S. foreign policy and national security objectives evolve.