In response to Egypt’s international request to freeze former leader Hosni Mubarak’s financial assets, the U.S. Department of the Treasury has warned financial institutions to be on the lookout for suspicious activity. See the Treasury’s warning here. Although this indicates the Treasury’s concern regarding illicit funds, is placement on the SDN List next for Mubarak?
In order to place an individual, organization or entity on the SDN List, a violation of an OFAC sanctions program must occur. Designations must occur under country-based sanctions or subject-matter sanctions.
The U.S. does not currently have a country-based sanctions program for Egypt. Therefore, in order to freeze Mubarak’s assets by placing him on the SDN List, OFAC would have to designate him under one of the subject matter areas. Specifically, OFAC would have to designate Mubarak as a terrorist, narcotics trafficker, diamond trader or a proliferater of weapons of mass destruction, which seems extremely unlikely.
It is debatable whether OFAC is the proper U.S. authority to freeze Mubarak’s assets. However, the U.S. government is not without options. The Department of Justice’s Asset Forfeiture and Money Laundering Section has a new legal team that is scouring the U.S. financial system for proceeds of theft by high-level foreign officials. This team is working in conjunction with the FBI in an effort to recover illicit funds and return them to victim countries through forfeiture proceedings. From a legal standpoint, this avenue seems more probable and realistic than an SDN designation by OFAC.
Whether the U.S. government will place Mubarak on the SDN List or attempt to acquire his assets through forfeiture, remains to be seen. One thing is certain – the U.S. has a strong interest in finding Mubarak’s potential illicit assets.
Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Litigation, International Extradition and OFAC SDN Litigation.
The author of this blog is Douglas McNabb. Please feel free to contact him directly at email@example.com or at one of the offices listed above.