Archive for the ‘Narcotics Sanctions’ Category



Rafa Marquez Shown Red Card By OFAC

Posted by at 1:08 pm on August 10, 2017
Category: Narcotics SanctionsOFACSDN List

By F. Vera | (Own work) [CC BY-SA 3.0 (] via Wikimedia Commons [cropped and color corrected]
ABOVE: Rafael Márquez Alvarez

Yesterday the Office of Foreign Assets Control (“OFAC”) designated legendary Mexican footballer Rafael Márquez under the Foreign Narcotics Kingpin Sanctions Regulations. According to the press release accompanying the designations Márquez allegedly acted as a front man for, and held assets for, Flores Hernandez and his “drug trafficking organization.”

The press release takes specific note, if not some scarcely concealed glee, that Márquez is a “Mexican professional soccer player.” In fact, Rafa Márquez is not just any professional player. He is arguably the best defender in Mexican history and certainly its most decorated. He currently plays for the Mexican club Atlas and captains the Mexican national soccer team. All of which makes you wonder why on earth he would waste time fronting for a drug kingpin and whether OFAC’s charges that he did so are even credible.  Tom Brady may have deflated a few footballs but it is unimaginable that he would ever go full Walter Heissenberg and involve himself with a methamphetamine distribution network.

Márquez, as you have probably guessed, is vigorously denying these charges.

So by now you’re probably wondering this: where’s the red card that OFAC has shown Márquez? We all know, don’t we, that blocking an employee doesn’t block the organization. The Mexican national team isn’t blocked just because Márquez is on it. When Mexico and the United States play in the 2018 World Cup, the U.S. team won’t get in trouble, will they, if Márquez is playing for Mexico?

Well, that’s not clear. Section 598.406 of the Foreign Narcotics Kingpin Sanctions Regulations prohibits any U.S. person from providing any “services . . . for the benefit of” Márquez. You can’t play soccer without two teams, so the U.S. players are performing a service for Márquez by playing (and not just if they lose). Maybe even Mexico will insist on playing Márquez in that game hoping that the U.S. will have to forfeit the game.

Of course, there’s always the possibility that OFAC will issue a general license — analagous to Iran General License F which permits U.S. athletes to compete in professional sporting events in and with Iran (although even that license carves out blocked persons). Or maybe OFAC will issue a specific license for the World Cup.

Another possibility is that by the time of the World Cup Márquez will have successfully challenged the designation and will have been unblocked. Márquez is unlikely to prevail if his argument before OFAC is that he didn’t have anything to do with Flores. OFAC will no doubt say that it has evidence that he did and that such evidence is classified because disclosing it would reveal intelligence sources and methods. The more fruitful course for Márquez, and the one most often used for getting OFAC to undesignate a party, would be to argue to OFAC (if true) that he no longer has any dealings with Flores and that he will commit not to have any in the future. He might propose a compliance monitor to the agency to back up that promise. And he could promise to use his megastar status to make PSAs and visit schools and engage in other good works.

Another possibility is that Mexico will impose blocking sanctions on Buster Posey, Bryce Harper, and Anthony Rizzo, and promise to lift them only if the sanctions on Rafa are lifted by OFAC. Stay tuned. ¡El miedo no anda en burro!

Photo Credit: By F. Vera | (Own work) [CC BY-SA 3.0 (] via Wikimedia Commons [cropped and color corrected]. Copyright 2011 F. Vera

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Copyright © 2017 Clif Burns. All Rights Reserved.
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OFAC in Wonderland

Posted by at 10:04 am on May 10, 2016
Category: Narcotics SanctionsOFAC

Soho Mall, Panama via Soho Facebook Page [Fair Use]

Late last week, the Office of Foreign Assets Control (“OFAC”) designated the Soho Mall in Panama City, Panama, as a Specially Designated Narcotics Trafficker under the Foreign Narcotics Kingpin Sanctions Regulations. The action was taken based on OFAC allegations that the Mall was engaged in money laundering on behalf of Waked Hatum whom OFAC also designated based on its belief that he and his organization were engaged in drug trafficking and money laundering.

The effect of that designation is set forth in section 598.202 of the Foreign Narcotics Kingpin Sanctions Regulations, which we cite in full because of its curiously fractured English (apparently translated from Middle English into Sanskrit before being rendered into a Modern English of sorts):

Except to the extent provided in regulations, orders, instructions, licenses, or directives issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date, there are blocked as of the effective date, and any date thereafter, all such property and interests in property within the United States, or within the possession or control of any United States person, which are owned or controlled by a specially designated narcotics trafficker.

“There are blocked”? Seriously?? Section 598.203 contains the normal provision prohibiting “any transaction or dealing” by a U.S. party in any “property or interest in property” of any specially designated narcotics trafficker.

With that background, General License No. 4, which permits certain transactions pertaining to the Soho Mall, comes as something of a surprise. The General License permits shipments of goods by U.S. persons to “non-designated” stores and other tenants in the mall provided the goods were ordered before May 5 and the delivery is completed prior to July 6. Yes, you read that right. The general license does relate to “non-designated” stores in the mall.

While it’s easy to understand the need for some license to wind-down operations by U.S. persons with the designated mall (a license, by the way, that was not issued), it is hard to understand the need for such a license for the non-designated stores in the mall itself. This license would only be necessary if OFAC thinks that somehow the designated mall has an “interest in” the inventory of the non-designated stores in the mall, a rather surprising idea at best. I can’t imagine what kind of interest this is other than perhaps the mall’s interest that the stores will sell their inventory so that they can pay their rent. By that logic, the mall also has an interest in all the inventory that the stores may have at other locations. So, if there is a MacDonald’s in the food court, no U.S. person can make any deliveries to any other MacDonald’s owned by the same franchisee anywhere else in the world.

It is difficult at this point to see what meaning, if any, is left for the phrase “interest in property.” Of course, OFAC, like Humpty-Dumpty in Alice in Wonderland, has little concerns for the niceties of logic and meaning

When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”

Apparently OFAC thinks that it can.

Photo Credit: Soho Mall, Panama via Soho Facebook Page [Fair Use]

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Copyright © 2016 Clif Burns. All Rights Reserved.
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OFAC and the Passion Fruit of the Poisoned Tree

Posted by at 5:07 pm on July 29, 2014
Category: Narcotics SanctionsOFAC

By A_Flama (Own work) [CC-BY-SA-2.0 (], via Flickr Campofresco, Inc., a Puerto Rican fruit juice processor and packager, has agreed to pay to OFAC $27,000 in connection with its purchase of passion fruit juice and pulp from a Colombian company designated under OFAC’s narcotics trafficking sanctions. This may represent the only time someone has been broken the law by buying fruit juice from a drug dealer.

Of course, when you look into this further, it’s not clear that “Frutas Exoticas Colombiana S.A.” — the Specially Designated Narcotics Trafficker (“SDNT”) involved — is in fact a drug dealer. Leaving aside that the OFAC notice announcing the settlement botched the name of the SDNT involved, which is actually (and more grammatically) Frutas Exoticas Colombianas S.A., the drug dealers in question have been out of the picture since 2005, when the Colombian Government kicked out Lorena Henao Montoya, the widow of narcotics trafficker Ivan Urdinola Grajales, and took over their holdings in Frutas Exoticas.  The Colombian government did this in response to OFAC’s designation order several months before in an effort to keep the company alive and to protect its innocent workers and their families. So, in fact, this case involves getting fined for buying passion fruit juice from the Colombian government.

OFAC knows this, of course, and issued a release stating that it would consider licenses on a case-by-case basis for dealings with Frutas Exoticas. This doesn’t help Campofresco, which, of course, did not apply for a license in the first place. Still it raises a number of questions. To begin with, what would OFAC look at on this case-by-case basis now that the government owns Frutas Exoticas? The type of fruit juice involved? Pineapple versus passion fruit? (Passion fruit, I suppose, being presumptively evil for the name, if nothing else.) The party of the President of Colombia? His birthdate and astrological sign?

The biggest question, of course, is this: what remains to be served by keeping a company once owned by narcos, but now seized and owned by the government, on the list at all? The answer appears to be that nothing is served unless the idea is to punish the Colombian workers who harvest the fruit and mash the pulp for the bad judgment of having been employed by a company once owned by a narcotics trafficker.

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Copyright © 2014 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)