General Note Concerning Unlicensed Litigation and Judicial Processes Involving Sanctioned Persons or Property; the Question of Whether Judicial Action Constitutes the Unlicensed "Transfer" of Blocked Property (System Ed. Note)

Last substantive commentary amendment:
Jan. 15 2024

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TURBOFAC Commentary (8177 words)

General Note Concerning Unlicensed Litigation Involving Sanctioned Persons or Property; the Question of Whether Judicial Action Constitutes the Unlicensed "Transfer" of Blocked Property (System Ed. Note)

 

1) BACKGROUND

 

2) U.S. PERSON LAWYERS REPRESENTING SANCTIONED PERSONS

 

3.1) UNLICENSED LITIGATION THAT INVOLVES BLOCKED PERSONS OR THEIR PROPERTY – OFAC'S JURISDICTION GENERALLY INTERPRETED TO ONLY COVER “TRANSFERS” (AND ORDERS “EFFECTING” TRANSFERS)

 

3.2) UNLICENSED LITIGATION INVOLVING WRITS OF ATTACHMENT FOCUSING ON BLOCKED PROPERTY – FROM COMPLAINT TO EXECUTION

 

3.3) SPECIAL TREATMENT FOR IN REM LITIGATION THAT FOCUSES ON BLOCKED PROPERTY

 

4) THE TERRORISM RISK INSURANCE ACT (TRIA) EXCEPTION

 

5) CERTAIN LITIGATION-RELATED ACTIONS THAT DO AND DO NOT CONSTITUTE “TRANSFERS” OF BLOCKED PROPERTY OR THE ISSUANCE OF ORDERS THAT EFFECT TRANSFERS

   * In general:

   * “Attempts”

   * Judicial orders constituting “contingent transfers” are probably not “transfers” or otherwise subject to OFAC’s jurisdiction

   * “Negotiations” involving blocked persons and property are usually prohibited,...