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Financial Services Law Insights and Observations

OFAC sanctions Mexican arms trafficker for supplying weapons to cartel

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

Financial Crimes

On February 28, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 14059 against a Mexican national for his role in providing, or having attempted to provide, financial, material, or technological support for, or goods or services in support of, the Cartel de Jalisco Nueva Generacion (CJNG). The CJNG is also designated under E.O. 14059. According to OFAC, the sanctions are part of a whole-of-government effort to combat global threats posed by illicit drug trafficking into the U.S. The agency stressed it will continue to coordinate with federal government partners and foreign counterparts to target and pursue accountability for foreign illicit drug actors. As a result of the sanctions, the designated individual’s property located in the U.S. or held by U.S. persons is blocked and must be reported to OFAC. Further, “any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons unless authorized by an OFAC-issued general or specific license, or exempt. OFAC further warned that “U.S. persons may face civil or criminal penalties for violations of E.O. 14059 and the Kingpin Act.”