On December 6, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) named one individual and 12 entities in the Democratic Republic of the Congo and Gibraltar as Specially Designated Nationals (SDNs) pursuant to the Global Magnitsky Sanctions program under Executive Order (EO) 13818.
The newly designated SDNs are part of a network of individuals and companies alleged to have provided material “support to sanctioned billionaire Dan Gertler,” who was designated under EO 13818, in December 2017, for allegedly engaging in significant corruption in the DRC mining and oil sectors. There are now 46 persons designated under EO 13813 in connection with Gertler.
EO 13818 authorizes OFAC to designate as SDNs foreign persons determined to be involved in serious human rights abuses or corruption globally. All property and interests in property of these SDNs (and any entity that is owned 50 percent or more by one or more SDNs) must be “blocked,” i.e., frozen if within the United States or in the possession or control of a US person. Additionally, there is a broad prohibition on dealing directly or indirectly with the SDNs or their “blocked” property to the extent US persons are involved.
Also, on December 6, 2021, the Biden administration announced a new US Strategy on Countering Corruption outlining steps that could strengthen the government’s “ability to prevent corruption, more effectively combat illicit finance, better hold corrupt actors accountable, and strengthen the capacity of activists, investigative journalists, and others on the front lines of exposing corrupt acts.”
Meanwhile, Deputy Treasury Secretary Wally Adeyemo gave a speech outlining a range of actions being taken by the Treasury Department to combat corruption worldwide and to limit the flow of illicit funds into the United States, including through the adoption of blocking sanctions and a proposed rulemaking aimed at increasing transparency in all-cash real estate transactions, among other actions.
According to Adeyemo, the brother of former DRC president Joseph Kabila, who facilitated Gertler’s allegedly corrupt deals, reportedly took advantage of lax US anti-money laundering rules to invest nearly $3.5 million of embezzled DRC government funds into US real estate.
The Treasury Department’s news release states that the DRC-related sanctions are part of a series of designations under the Global Magnitsky program planned to coincide with International Anti-Corruption Day and International Human Rights Day. On December 7, 8, and 9, OFAC announced the designations of individuals and entities in Angola, Bangladesh, China, El Salvador, Guatemala, Iran, Kosovo, Liberia, Myanmar, North Korea, South Sudan, Syria, Uganda, and Ukraine in connection with allegations of serious human rights abuses and corruption in those countries. The Treasury announcements regarding those designations are available here, here, here, and here.
See this blog post for details about the US Treasury Department’s proposed rulemaking for all-cash real estate transactions.
For more information on how these developments may apply to your organization, contact a member of Steptoe’s Economic Sanctions team.
# # #