Earlier this week, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) imposed sanctions on a Mexican tequila company that has allegedly been involved in the laundering of funds on behalf of the Los Gueros organization. The tequila company targeted, El Viejo Luis, was among five companies accused of laundering funds on behalf of Los Gueros. Several individuals were also targeted by OFAC’s action. According to OFAC, Los Gueros are based in Guadalajara, Mexico and are alleged to be involved in trafficking narcotics to the United States.
As a result of the designation, made pursuant to the Foreign Narcotics Trafficking Kingpin Designation Act (“Kingpin Act”). As a result any assets belonging to those parties coming under U.S. jurisdiction are to be blocked and U.S. persons are prohibited from engaging in most transactions with those designated parties.
OFAC’s action targeted family members and associates of Los Gueros leaders who are suspected of acting on behalf of the organization. This is a very common occurrence. It’s typical in cases where parties are identified for sanctioning under the Kingpin Act that OFAC will also target members of the parties’ families who share bank accounts, interests in companies, and/or other assets with those parties believe to be engaged in narcotics trafficking activities. This is true even in cases where the sharing of such assets or interests is relatively minor. As such, those parties who have been designated, and have no idea how that designation came about, they may want to look into whether they have any shared accounts, businesses, or assets with any other parties designated on the OFAC SDN List, or who may be related to parties designated on the OFAC SDN List. IF such connections are found, it would be wise to cut those ties, dispose of those assets in a lawful manner, and apply to OFAC to be removed from the Specially Designated Nationals and Blocked Persons List (“SDN List”) under 31 C.F.R. 501.807 due pursuant to a change in circumstances. Without following such a course of action, OFAC’s designation won’t go away, no matter how many shots of El Viejo Luis the designated party takes.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.