OFAC Alert: President Trump Expands OFAC Sanctions under CAATSA and UFSA

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On September 20, 2018, President Donald J. Trump issued Executive Order 13849 (“E.O.”), “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act [CAATSA].”  Notably, the E.O. authorizes the Secretary of the Treasury (“Treasury”) to take certain actions to further implement the sanctions imposed on a person pursuant to CAATSA or to the Ukraine Freedom Support Act (“UFSA”).  It also directs the U.S. Government’s relevant agencies and departments to take all appropriate measures within their authority to ensure the full implementation of those sanctions.

Specifically, the E.O. authorizes Treasury to take the following measures against the sanctioned person: (i) prohibit U.S. financial institutions from issuing loans of more than $10 million in a 12-month period; (ii) prohibit forex transactions subject to U.S. jurisdiction that involve the sanctioned person; (iii) prohibit the transfer of credit or payments between financial institutions under U.S. jurisdiction that involve the sanctioned person; (iv) block the sanctioned person’s property under U.S. jurisdiction; and (v) prohibit all U.S. citizens, permanent residents, businesses and financial institutions (“U.S. Persons”) from buying certain equity or debt from the sanctioned person.

Additionally, the E.O. requires relevant U.S. Government agencies to take the following additional measures against the sanctioned person, in consultation with Treasury and the Secretary of State (“Secty”): (i) the U.S. Export-Import Bank must deny the issuance of any guarantee, insurance, or extension of credit to the sanctioned person; (ii) relevant government agencies and departments must deny the sanctioned person any license or permission for the export or reexport of goods or technology that require the U.S. Government’s approval; (iii) the U. S. executive director of each international financial institution shall oppose any loanfrom the international financial institution that would benefit the sanctioned person; and (iv) Secty shall deny a visa to, and the Secretary of Homeland Security shall exclude from the United States, any alien that Treasury sanctions pursuant to CAATSA or UFSA.

In case that the target of a sanction under CAATSA or UFSA is a legal entity, the E.O. also authorizes Treasury and the rest of the U.S. Government agencies and departments to impose the above measures on the legal entity’s principal executive(s).

The Treasury’s Office of Foreign Assets Control (“OFAC”) anticipates promulgating regulations to implement these sanctions. OFAC will also issue the appropriate administrative subpoenas and licenses, and will penalize sanctions violations.



Info: Michael Diaz, Jr., Robert I. Targ, Fausto Sánchez

Tel: +1 (305) 375-9220