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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On December 15, 2021, President Joseph Biden signed &ldquo;<a href="https://home.treasury.gov/system/files/126/illicit_drugs_eo.pdf" target="_blank" rel="noopener">Executive Order on Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade</a>,&rdquo; an order finding that &ldquo;the trafficking into the United States of illicit drugs, including fentanyl and other synthetic opioids, is causing the deaths of tens of thousands of Americans annually, as well as countless more non-fatal overdoses with their own tragic human toll.&rdquo; Noting that drug cartels, transnational criminal organizations, and their facilitators &ldquo;are the primary sources of illicit drugs and precursor chemicals that fuel the current opioid epidemic, as well as drug-related violence that harms our communities,&rdquo; the president declared a national emergency to deal with the threat. The executive order authorizes the Department of the Treasury to target any foreign person engaged in drug trafficking activities, and to sanction foreign persons who knowingly receive property that constitutes, or is derived from, proceeds of illicit drug trafficking activities.
Immediately following issuance of the executive order, the Department of the Treasury&rsquo;s Office of Foreign Assets Control (OFAC) <a href="https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20211215" target="_blank" rel="noopener">designated 25 actors</a> (10 individuals and 15 entities) in four countries determined to be involved in the global illicit drug trade for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. According to OFAC, these designations target individuals and drug trafficking organizations located in Brazil, China, Colombia and Mexico and are &ldquo;individuals who traffic fentanyl, and its precursor chemicals, methamphetamine, cocaine, and heroin, as well as organizations that pose the greatest drug threat to the United States.&rdquo; As a result of these sanctions, all property and interests in property of the designated persons and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more designated persons are also blocked. Unless authorized by a license or exemption issued by OFAC, all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited.
In addition to designating persons and entities engaged in illicit drug trade and blocking property, the executive order also authorizes the Treasury Department to select one or more other sanctions, including:
<ul>
<li>prohibit any transfers of credit or payments between financial institutions, or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned person;</li>
<li>prohibit any U.S. financial institution from making loans or providing credit to the sanctioned person;</li>
<li>prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned person has any interest;</li>
<li>prohibit any U.S. person from investing in or purchasing significant amounts of equity or debt instruments of the sanctioned person; or</li>
<li>impose on the principal executive officer or officers of the sanctioned person, or on persons performing similar functions and with similar authorities as such officer or officers, any of these sanctions.</li>
</ul>
In addition, under the executive order, the Department of State has <a href="https://www.state.gov/combating-transnational-crime-and-imposing-sanctions-on-persons-involved-in-the-global-illicit-drug-trade/" target="_blank" rel="noopener">announced</a> the formal establishment of the U.S. Council on Transnational Organized Crime (USCTOC) to combat transnational organized crime more effectively. The State Department has also suspended the visas for the individuals designated by OFCA, thus prohibiting them from entering the United States.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

President Biden Issues Executive Order Imposing Sanctions Regarding the Global Illicit Drug Trade