The US Office of Foreign Assets Control has continued enforcement activity demonstrating an interest in advancing US foreign policy interests covered by its regulations. This activity includes not only civil enforcement actions but also criminal indictments or prosecutions that address a number of potentially open issues when interpreting the extent to which the OFAC sanctions apply to activities or individuals outside the United States.
In a recent case involving multiple defendants, U.S. v. Reza Zarrab et al., S4-15-CR-867 (RMB), the US District Court for the Southern District of New York is considering the extent to which the International Emergency Economic Powers Act (IEEPA) authorizes OFAC and other enforcement authorities to criminalize and prosecute in federal district court a non-US person’s activities occurring outside the United States that may be sufficient to result in civil or administrative secondary sanctions penalties, such as designation of specially designated nationals (SDN) status, but where no US nexus is alleged in connection with the non-US person’s behavior.