International Issues

OFAC Places International Oil Smugglers on Sanctioned Watch List

The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) officially sanctioned 6 individuals, 24 entities, and 7 vessels in cooperation of Executive Order 13726 on February 26, 2018.[i]

This move signifies that the U.S. government is committed to combating Libyan oil smuggling and other illicit activities in the region.

It follows on the heels of a 2016 Executive Order (E.O. 13726), which included such provisions, among others, that prohibit “actions or policies that threaten the peace, security, or stability
of Libya, including through the supply of arms or related materiel.”[ii]

The U.S. government explained its decision, stating that it was designed to stop individuals and parties that were “threatening the peace, security, or stability of Libya through the illicit production, refining, brokering, sale, purchase, or export of Libyan oil or for being owned or controlled by designated persons.”[iii]

According to the Wall Street Journal, two Maltese men were accused of running an “unofficial consortium for smuggling Libyan oil to Malta and Italy in an operation that reportedly earned them more than 30 million euros.”[iv]

Maltese officials were shocked by the decision, saying they were not warned by American authorities.

“We did not know these sanctions would be issued. The American authorities did not make any contact with us over the matter,” they admitted.[v]

Why This Matters to You

Malta—home of the venerated Maltese Cross, not to mention the inspiration behind one of the most iconic examples of film noir of the last century—and its nationals, entities and vessels are rarely at the top of mind when it comes to discussions about sanctioned parties. But this case further demonstrates that anyone, from anywhere, can be placed on an OFAC watch list at any given time.

The takeaway? Help avoid substantial fines and potential criminal charges by screening, and then ensure you re-screen against watch lists that are up-to-date before every transaction.

[i] Treasury Sanctions International Network Smuggling Oil from Libya to Europe. Press Release. U.S. Department of the Treasury. Accessed March 12, 2018.

[ii] Blocking Property and Suspending Entry Into the United States of Persons Contributing to the Situation in Libya. Executive Order/Presidential Documents. Accessed March 8, 2018.

[iii] Treasury Sanctions International Network Smuggling Oil from Libya to Europe.

[iv] The Morning Risk Report: Keeping Tabs on Rising Number of Investment Advisers. Article. Washington Street Journal. Accessed March

[v] US sanctions subjects a ‘surprise’ for Malta police. Article. Times of Malta. Accessed March 8, 2018.