The US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a final rule amending and reissuing the Transnational Criminal Organizations Sanctions Regulations, 31 C.F.R. 590 (“TCOSR”) to further implement two existing Executive Orders (“EO”) related to transnational criminal organizations, EO 13581 of July 24, 2011, “Blocking Property of Transnational Criminal Organizations,” and EO 13863 of March 15, 2019, “Taking Additional Steps to Address the National Emergency With Respect to Significant Transnational Criminal Organizations.” The final rule replaces the prior TCOSR published on January 12, 2012 in abbreviated form. The amended and reissued TCOSR have additional interpretive guidance, definitions, and general licenses, and became effective on January 21, 2022.
OFAC issued the TCOSR on January 12, 2012 to implement EO 13581, which blocks the property and property interests of listed entities and individuals determined to be “significant transnational criminal organizations,” or to have provided material support for, to be owned or controlled by, or to have acted on behalf of such organizations. When first issued, the TCOSR were issued in abbreviated form to provide immediate guidance to the public. Later, on July 23, 2019, OFAC amended the TCOSR to implement EO 13863, resulting in additional sanctions targeting “significant transnational criminal organizations” in light of the evolution and increasing threat of these organizations.
Amended and Reissued TCOSR
OFAC stated that it has amended the TCOSR to provide a more comprehensive set of regulations. Due to the number of amendments, OFAC has reissued the TCOSR in their entirety. Below we summarize key points under the amended and reissued TCOSR:
- Interpretive Guidance: The TCOSR now have additional interpretive guidance in subpart D of the TCOSR, including interpretive guidance related to offshore transactions involving blocked property and payments from blocked accounts, among other things.
- Definitions: Certain of the definitions in subpart C of the TCOSR have been amended. For example, the definition of “significant transnational criminal organization” is no longer limited to “such as those listed in the Annex to” EO 13581 (i.e., The Brothers’ Circle, Camorra, Yakuza, and Los Zetas). Without the limiting phrase, the scope of the US government’s power to designate entities as “significant transnational criminal organizations” has been broadened. Subpart C of the TCOSR also has new definitions including a new definition for “financial, material, or technological support” which provides further guidance.
General Licenses: In subpart E of the TCOSR, several new general licenses were added (Sections 590.506, 590.508, 590.510, and 590.11), existing general licenses were renumbered, and technical edits were made to certain existing general licenses. Sections 590.506, for example, authorizes US financial institutions to invest and reinvest assets blocked under the TCOSR subject to certain conditions.