OFAC: Blocking Order procedures clarified
A final rule issued by the Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’), that went into effect on 17 September, clarifies procedures for issuing orders that block or identify as blocked specific property or interests in property, and addresses orders that impose prohibitions less than full blocking.
The new rule updates 35 of OFAC’s sanctions regulations, according to a notice published in the Federal Register.
‘The 35 parts of 31 CFR chapter V that are the subject of this rule implement OFAC’s authority to block the property and interests in property of persons pursuant to, among other authorities, the International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. (IEEPA)’ OFAC said in its notice.
It explained: ‘The most common way OFAC exercises its authority is by designating a person and placing that person on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List). Once designated, all property and interests in property subject to U.S. jurisdiction of the designated person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving any property or interest in property of the designated person. However, in certain cases, OFAC may exercise its authority in narrower ways. These actions include issuing orders or directives that impose prohibitions less than fully blocking the entirety of a person’s property and interests in property as circumstances require. Such tailored actions are based on a combination of OFAC’s authority to block all property of a designated person and its authority to narrow the scope of such broad prohibitions through orders, directives, or licenses.
‘This rule identifies three forms that such actions by OFAC may take: (1) identifying property or interests in property as blocked pursuant to OFAC’s authority due to an interest of an already blocked person, including where such interest may not be apparent to the public; (2) blocking specific property or interests in property of a person who is not already blocked but whom OFAC is investigating for potential designation; and (3) blocking or imposing other prohibitions with respect to a person’s specific property or interests in property less than full blocking sanctions.’
