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Financial Services Law Insights and Observations

OFAC sanctions Hizballah financiers in Lebanon

Financial Crimes Of Interest to Non-US Persons OFAC Department of Treasury Sanctions OFAC Designations SDN List Lebanon

Financial Crimes

On January 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 against three Hizballah-linked financial facilitators and their Lebanon-based travel company. According to OFAC, “Hizballah’s widespread network of financial facilitators has helped the group exploit Lebanon’s financial resources and survive the current economic crisis.” The designated persons allow Hizballah “access to material and financial support through the legitimate commercial sector to fund its acts of terrorism and attempts to destabilize Lebanon’s political institutions,” OFAC stated, adding that the sanctions demonstrate the agency’s “ongoing efforts to target Hizballah’s continued attempts to exploit the global financial sector and evade sanctions.” As a result of the sanctions, all transactions by U.S. persons or in the U.S. that involve any property or interests in property of designated or otherwise blocked persons are generally prohibited. Additionally, “any entities that are owned, directly or indirectly 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, must be blocked and reported to OFAC.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons, unless exempt or authorized by a general or specific OFAC license. OFAC further warned that the agency “can 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 either knowingly conducted or facilitated any significant transaction on behalf of a Specially Designated Global Terrorist,” or “knowingly facilitates a significant transaction for Hizballah or certain persons designated for their connection to Hizballah.”