Industry News

House Passes Bill Designed to Target Sanctions Evaders

Aug. 2, 2021


On July 20, 2021, the US House of Representative passed a bill designed to strengthen the overall effectiveness of US sanctions. The Bassam Barabandi Rewards for Justice Act would authorize the Department of State to offer financial rewards in return for the provision of information regarding the identity or location of individuals and entities who defy US or UN sanctions. Those behind the bill hope that if ultimately passed by Congress, the Act would represent a simple yet effective sanctions enforcement tool.

While the idea seems straightforward in concept, the ability to offer financial rewards for information regarding sanctions evasion practices would represent a notable shift in policy. While existing programs currently authorize rewards for information leading to the arrest of designated terrorists and criminals engaged in human trafficking, smuggling, and other transnational crimes, no such program is available to assist in the fight against sanctions evasion.

In order to implement this shift, the Act would amend the State Department Basic Authorities Act of 1956 (BAA) to authorize rewards relating to sanctions evasion under existing State Department rewards programs. Specifically, the proposed bill would make amendments to the BAA by adding language which expressly authorized payments made to individuals who provide information relating to the identification or location of an individual or entity who knowingly, either directly or indirectly, imports, exports, or reexports items in contravention of US or UN sanctions, or provides training, advice, or other services or assistance, or engages in significant financial transactions, relating to any such goods, services, or technology in contravention of such sanction.

The bill is named after Bassam Barabandi, a former Syrian diplomat who defected to the US in opposition to the regime of Bashar al-Assad and its human rights abuses. Barabandi ultimately provided information regarding regime activities and sanction evasion to Congress, US officials, and think tank scholars. According to Barabandi, as things currently stand targeted US sanctions often fall short of their stated objective, as receiving a sanctions designation is often seen as a “badge of loyalty” in locations such as Syria, North Korea, Iran, and Russia. Those behind the bill hope that its implementation would incentivize many individuals surrounding known sanctions evaders to share what they know about evasion practices and schemes.

According to the bill, current rewards programs related to terrorism and transnational crime have paid out more than $250 million in rewards since the 1980s, with most awards ranging between $1 million and $5 million. If you have any questions regarding this bill or OFAC compliance do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.