2025 Email from OFAC in re: Blocking of Expired Standby Letter of Credit [Query in PDF]

Date issued: Mar. 21 2025

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TURBOFAC Commentary (527 words)

Notes:

1) Contrast Centrifugal Casting Machine Co Inc v. American Bank & Trust Co, 966 F. 2d 1348 (10th Cir. 1992) (There, OFAC argued that a down payment in a bank account of the U.S. goods producer, that represented a down payment received in connection with an unfulfilled contract and paid pursuant to a letter of credit, was property in which the blocked customer had "ha[d] a property interest...because it was allegedly a contract payment made by [the blocked party], which [it] should recover because [the U.S. goods supplier] breached the contract." The court rejected the argument, finding that an “issuer's obligation to pay on a letter of credit is completely independent from the underlying commercial transaction between the beneficiary and the account party”.

Here, there is a question of whether blocked person has an “interest” in an expired letter...