The Office of Foreign Assets Control (“OFAC”) of the United States Department of the Treasury administers and enforces economic and trade sanctions against certain foreign countries, entities and other Specially Designated Nationals (“SDNs”) based on US foreign policy and national security goals. OFAC acts under presidential national emergency powers, as well as legislative authority. The list of sanctioned countries, entities and individuals is constantly evolving.
Given the current state of affairs, the United States recently imposed additional sanctions against Libyan individuals and entities.
On February 25, 2011, President Obama issued Executive Order 13566 blocking property and prohibiting certain transactions related to Libya. Citing the “extreme measures” taken against the people of Libya and the “serious risk” that Libyan state assets will be misappropriated, the President declared that the current circumstances pose a serious risk to Libya’s stability as well as a threat to the United States. The Order prohibits all transactions involving the property or property interests in the United States, that hereinafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following designated individuals:
n Colonel Muammar Qadhafi;
- the Government of Libya, its agencies, instrumentalities, and controlled entities, including the Central Bank of Libya;
- Ayesha Qadhafi, Lieutenant General in the Libyan Army;
- Khamis Qadhafi;
- Mutassim Qadhafi, National Security Advisor and Lieutenant Colonel in the Libyan Army;
- Saif Al-Islam Qadhafi;
- Senior officials of the Government of Libya;
- Any children of Colonel Muammar Qadhafi;
- Anyone responsible for, complicit in, or supporting the current human rights abuses in Libya; as well as
- Spouses and dependents of any blocked person.
Following on the President’s order, on March 11, 2011, OFAC designated nine individuals as blocked persons subject to Executive Order 13566. These individuals include senior officials of the Government of Libya as well as the wife and several of Muammar Qadhafi’s children. On March 22, 2011, OFAC identified 14 companies owned by Libya’s National Oil Corporation that were also subject to sanctions pursuant to Executive Order 13566. These companies are:
- Arabian Gulf Oil Company
- Azzawiya Oil Refining Company
- Brega Petroleum Marketing Company
- Harouge Oil Operations
- Jamahiriya Oil Well Fluids and Equipment
- Mediterranean Oil Services Company
- Mediterranean Oil Services GMBH
- National Oil Fields and Terminals Catering Company
- North African Geophysical Exploration Company
- National Oil Wells Drilling and Workover Company
- Ras Lanuf Oil And Gas Processing Company
- Sirte Oil Company for Production Manufacturing of Oil and Gas
- Zueitina Oil Company
- Waha Oil Company
These sanctions prohibit U.S. persons or entities, wherever located, from engaging in transactions with any designated individual or entity. The Treasury Department has specifically exempted transactions involving banks that are owned or controlled by the Government of Libya and organized under the laws of a country other than Libya. Such transactions cannot, however, involve the Government of Libya or any person whose property and interests in property are blocked. Additionally, the Government has issued General Licenses allowing for (i) the provision of goods or services in the United States to the diplomatic missions of the Government of Libya to the United States and the United Nations and (ii) the provision of certain legal services to or on behalf of the Government of Libya, its agencies, instrumentalities, and controlled entities.
While not all transactions with Libyan entities have been prohibited, the continuing conflict and recent additions to the list of designated individuals and entities reflect the U.S. government’s intention to place increased pressure on Libya. In our experience, the government often takes an expansive view of the types of transactions or involvement in those transactions that are prohibited. We, therefore, urge clients to proceed with caution when dealing with any transaction involving Libyan individuals or entities.
The Executive Order as well as other related administrative materials can be found on OFAC’s website: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/libya.aspx.