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Financial Services Law Insights and Observations

OFAC designates Lebanon and DRC-based Hizballah money launderers

Financial Crimes OFAC Of Interest to Non-US Persons Sanctions Anti-Money Laundering

Financial Crimes

On December 13, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against two Lebanon- and Democratic Republic of the Congo (DRC)-based money launderers and their affiliated companies for allegedly generating tens of millions of dollars for Hizballah, its financiers, and their activities. According to OFAC, the sanctions are part of Treasury’s continued prioritization to disrupt “the full range of Hizballah’s illicit financial activity,” which has, to date, designated 80 Hizballah-affiliated persons since 2017. As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC notes that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and states that persons who engage in certain transaction with the designated individuals and entities “may themselves be exposed to sanctions or subject to an enforcement action.” The designated persons are also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allow OFAC the authority to “prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for a terrorist group like Hizballah, or a person acting on behalf of or at the direction of, or owned or controlled by, [a Specially Designated Global Terrorist] such as Hizballah.”

OFAC also issued three new counter terrorism-related FAQs, which provide additional guidance related to the designated persons.

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