Jan

29

Another Reason not to Hire the Russian Mob


Posted by at 11:09 pm on January 29, 2018
Category: OFACSanctionsSDN List

Hotel Vesna via https://images.trvl-media.com/hotels/5000000/4730000/4724200/4724109/4724109_48_d.jpg [Fair Use]This story is on some month-old news that I missed at the time of the announcement. But without much else going on right now, I thought it worthy of a belated mention. Back in December, OFAC designated Thieves in Law («Вор в закoне»), a Russian organized crime group, under the agency’s Transnational Criminal Organization Sanctions Regulations (“TCO Sanctions”). The Thieves in Law apparently originated in the Russian gulags after the Russian Revolution. Unlike the Mafia, you could not belong to the group unless you had already been in jail. And like the Boy Scouts, they have their own code of conduct which, unlike the Boy Scout Code, forbids marriage and work. They sound like The Lost Boys in Peter Pan, except with tattoos and machine guns.

On one level, it seems somewhat odd to designate an organized crime organization since it is more a concept than a legal entity. It is not like the Thieves in Law own property, want to open a checking account for the group, or want to enter into legal contracts (as opposed to, say, the hit “contracts” often entered into by criminal gangs). Designating an unorganized group is rather like designating, say, the Beliebers, although on further reflection I might actually be completely in favor of blocking the Beliebers.

Of course, at the same time that OFAC designated Thieves in Law, it also designated some of the groups more visible adherents and supporter, which seems more logical since they will own property that can be blocked and may seek to do business with others. As a result, the Vesna Hotel and Spa, which is in Sochi and which is owned by Ruben Tatulian, was also blocked and added to the SDN List. Tatulian was designated for allegedly providing material support to Thieves in Law.

Although I doubt many Americans are traveling to Sochi these days, this designation might create a trap for unwary travelers. Executive Order 13581, which serves as the basis for the TCO Sanctions, was promulgated under the International Emergency Economic Powers Act, meaning that the travel exemption in section 1702(b)(4) of that Act would apply.  The travel exemption permits “any transactions ordinarily incident to travel to or from any country.” It seems to me that, even though the exemption would on its face cover travel by U.S. persons which involved staying in that hotel, it could also be argued that staying at that hotel is not ordinarily incident to travel to Russia.  This would be because there are plenty of other places to stay in Sochi not to mention within Russia. Moreover, a broad reading of the travel exemption would completely negate the designation of the hotel, so there is a good chance that OFAC would take the position that the exemption would not apply.

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