We reported earlier this week on an anticipated policy announcement by the White House that would permit families of hostage victims to pay ransoms to the captors without fear of prosecution by the federal government. Of course, we wondered whether this amnesty would extend to relieving families from penalty actions by OFAC and the answer is, not surprisingly, no.

The new executive order on this policy can be found here. It says nothing about administrative penalties and leaves OFAC with a free hand to fine families that pay ransoms if the captors are on the Specially Designated Nationals and Blocked Persons List. The non-prosecution promise is not even in the executive order but is in a non-binding “Statement” from the Department of Justice that says: “The department does not intend to add to families’ pain in such cases by suggesting that they could face criminal prosecution.”

And what does OFAC have to say about payments of ransom by families to SDN kidnappers? Not one single word. So, as things stand now, families that pay ransoms will probably, unless DoJ changes its mind, not go to jail but they could wind up paying a second ransom payment to OFAC.

Samuel Rubenfeld at the Wall Street Journal digs deeper into the issue. (Full disclosure: Mr. Rubenfeld interviewed me and quoted me in his article.) As he correctly notes, the DoJ statement only provides some solace to families and not to any of the necessary parties that assist in the payment of the ransom. Unless the family itself carries a suitcase of cash to the Middle East to pay the ransom personally to the kidnappers, which is probably not the smartest idea in the world, they are going to need help from someone outside the family. And whoever provides such assistance would be liable to prosecution for material support of terrorists as well as fines from OFAC if the kidnappers were on the SDN List.

What this means, as I said in the WSJ article, is this: “This change in policy is a way to put a nice face on an uncomfortable situation, but it’s not going to ultimately change anything.”