Who Is On The “Clinton List” and Can They Get Removed?

U.S. persons must not engage in transactions with individuals and entities the U.S. Government has put on the famed “Clinton List,” at risk of severe civil and criminal sanctions. Can people on this list get removed? It is not impossible. There is a way to do it. And it does happen.  How often? Read this post to the end and find out.

Colombians and businesses operating there are familiar with something colloquially known as the “Clinton List,” or La Lista Clinton.” This is more formally and correctly known as the list of Specially Designated Nationals or SDNs. It is maintained by the US Treasury Department Office of Foreign Asset Control or OFAC. Transactions with persons on the list are prohibited unless OFAC grants a license. Specifically, this is a

list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. persons are generally prohibited from dealing with them.

The regulations apply to

All U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches

Violations carry stiff penalties:

criminal penalties can include fines ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30 years for willful violations. Depending on the program, civil penalties range from $250,000 or twice the amount of each underlying transaction to $1,075,000 for each violation.

The list is frequently updated with the addition of the names of new individuals or entities. The basis for inclusion on the list is, very frequently in the case of Colombia, drug trafficking or nefarious connections to drug traffickers. Recent OFAC actions are reported here.

Many people believe it is impossible to get removed. How true is this? Certainly, in the case of someone who belongs on the list, getting removed is wishful thinking. But what if an individual believes he or she has incorrectly been placed on the list? What if there has been mistaken identity, or, if the Government’s information is inaccurate or incomplete?

For example, in the fall of 2009, news broke that a well-known Bogotá lawyer was placed on the Clinton list. The Government stated that this individual helped members of the Ochoa family, convicted drug traffickers, to launder money through the sale of property. The lawyer, at the time, released a statement denying responsibility. The lawyer claimed to have acted on behalf of Spanish nationals who contacted his law firm seeking assistance in purchasing land for a hotel development. The lawyer prepared the purchase contract and acted as agent for the buyers under a power of attorney to purchase the property. The seller was, the Government alleges, a front man (a “testaferro”) concealing the Ochoa’s ownership. The lawyer’s public statement asserted that he was completely unaware of the Ochoa connection, and that it was actively and carefully concealed from him as it was from the authorities. The lawyer could have carefully checked the OFAC SDN list for the testaferro but he would not have found him there. The lawyer also asserts that, using reasonable measures employed by any responsible Colombian lawyer, he could not, did not, and would not have found the testaferro was fronting for the Ochoas. What’s a lawyer to do? This lawyer also enjoys – or did, before the listing – a good reputation in Colombia. So well-regarded, in fact, was the lawyer that he was — until he was listed — the President of a very large, prestigious Bogotá country club. He had never been under suspicion before.

Does this lawyer have any chance of removal?  The facts of this case have not been tested or established publicly, so the answer in this particular case is not known.

But, the correct response in general is this: it is not impossible. There is a way to do it.  And it does happen.

OFAC issues specific licenses that permit lawyers to represent SDNs in seeking to be removed from the list. An American lawyer (not me, not my firm) is in fact currently representing this lawyer seeking his removal from the list. How this is done varies, depending upon the circumstances. It is a very sensitive task and requires among other things a special license from OFAC and knowledge of how to deal with OFAC’s and other agencies’ relevant concerns.

And while it may seem nearly impossible, my research and our experience shows that quite a few individuals and entities have been removed from the list. In fact, in just the last year, since March 4, 2008, there have been 29 announcements of removals from the list. There have been 231 indivuduals or entities removed from the list.

And, this may be a startling fact: of all the 231 SDNs removed from the list, 191 were Colombian. That is, 83% of individuals or entities declared to be SDNs and later removed from the Clinton List are Colombian individuals or entities.

For a count of how many Colombian individuals and entities were placed on the list during the same time frame, and some information about the time frames involved between listing and removal, as well as more detailed information about licenses, stay tuned for more information, or contact me.