David L. Hall

Examining the Effectiveness of the Kingpin Designation Act in the Western Hemisphere

November 8, 2017 Published Work
Prepared Testimony Before the Subcommittee of the Western Hemisphere, Committee on Foreign Affairs, United States House of Representatives

The Office of Foreign Assets Control ("OFAC") administers numerous sanctions programs focused on foreign countries, rogue regimes, terrorist organizations, criminal organizations, and other persons and entities that pose a threat to U.S. national security and U.S. foreign policy objectives. While some of these programs place prohibitions on specified activities with persons and entities in targeted foreign countries, others, like the Foreign Narcotics Kingpin Designation Act (the "Kingpin Act") target individuals and entities involved in criminal enterprises such as narcotics trafficking. Collectively, these individuals and entities make up the Specially Designated Nationals and Blocked Persons List (the "SDN List"). The SDN List is a 1,054 page document identifying more than 5,000 individuals and entities blocked under an OFAC sanctions program.[1] With rare exceptions, U.S. persons are prohibited from engaging in transactions with any individuals or entities on the SDN List.

The objective of the Kingpin Act, as with other sanctions programs, is to cut off known bad actors (in this case foreign narcotics traffickers and their criminal organizations) from access to U.S. financial markets, thus crippling their ability to reap the rewards of their criminal actions and to weaken their ability to fund their criminal enterprise. The strength of these programs lies in the Government's ability to ensure that non-government actors in the United States, primarily financial institutions and U.S. business, act as gatekeepers to prevent these bad actors from moving funds, making investments, and purchasing good and services. While law enforcement agencies are responsible for apprehending the bad actors and stopping the movement of narcotic into the United States, OFAC aims for the purse-strings of these criminal organizations.

To read the full prepared testimony, please click the PDF link below.

[1] In addition to the SDN List, OFAC administers a list of persons and entities subject to Sectoral Sanctions (Russia/Ukraine Sanctions Program) and Foreign Sanctions Evaders. The Department of Commerce similarly publishes a list of entities and individuals subject to export restrictions regulated by the Bureau of Industry and Security ("BIS"). OFAC maintains a Consolidated Sanctions List which includes the following data files: Foreign Sanctions Evaders (FSE} List; Sectoral Sanctions Identifications (SSI) List; Palestinian Legislative Council (NS-PLC) List; The List of Foreign Financial Institutions Subject to Part 561 (the Part 561 List); Non-SDN Iranian Sanctions Act (NS-ISA) List; and the List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599 (the 13599