Compliance Blog

If you ever wondered how powerful the OFAC SDN List is, all you had to do is read a Treasury Press Release issued earlier this week.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today removed from its list of Specially Designated Narcotics Traffickers 60 individuals who, since their designation, have severed ties with Colombia's notorious Cali drug cartel and are assisting Colombian authorities. All 60 individuals are Colombian employees of Copservir, a previously-designated enterprise that operated a retail drugstore chain before the Colombian government seized control of its operations in September 2004.

"Removing the names of these Copservir employees from the list of Specially Designated Narcotics Traffickers is the result of close cooperation with the Colombian government," said OFAC Director Adam J. Szubin. "Today's action represents a success in OFAC's targeting of Colombian drug cartels, as these 60 individuals have cut ties with the Rodriguez Orejuela narcotics trafficking organization and have instead cooperated with the Colombian authorities during the forfeiture process."

You can access the press release here. As you can see, no one wants to be on this list.  It has the effect of helping individuals decide to cooperate with law enforcement.  In 2007, OFAC published this study which showed the impact of its sanctions on the drug cartels.  (Please note: the study is almost 18 MBs in size!)  If you have time, this study does a good job of showing the isolation effect of appearing on the SDN list. In one situation, authorities placed a soccer team, which was owned by a suspect, on the list.

(I)n November 2006, within 72 hours of the designation of the soccer team Cortulua, the team’s president and three of its five board members resigned, sponsors withdrew their support, and key business partners publicly announced the severing of all commercial ties with the team.

Amazing.  Can you imagine this bar conversation?

Fan #1:  Man, my team really stinks right now.  We just can't score goals, and our defense is terrible.
Fan #2:  Stop complaining.  My team was just placed on the SDN list. 
Fan #1:  Ouch.

Read other OFAC related blog entries here.