Recent additions to the Specially Designated Nationals (SDN) List highlight an increasing enforcement focus on corruption and money laundering. On August 24, 2021, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Paraguayan individuals and five associated entities to the SDN List in response to a corruption and money-laundering scheme involving local and federal bureaucracies. OFAC noted that the Tri-Border Area (TBA) where Argentina, Brazil, and Paraguay converge “is marked by a large number of unregistered money exchange houses, trade based money laundering through export-import and retail businesses in the electronics and automotive sectors, the lack of awareness of money laundering and terrorist financing typologies and risk in the private sector, the intensive use of cash by businesses and individuals, and a large volume of transfers to high risk jurisdictions.” OFAC’s Director, Andrea Gacki, stated that this action “demonstrates the U.S. government’s ongoing effort to impose tangible and significant consequences on corrupt actors in order to protect the U.S. financial system from abuse.”
In this instance, three Paraguayan individuals, Kassem Mohamad Hijazi, Khalil Ahmad Hijazi, and Liz Paola Doldan Gonzalez, and five related entities connected to them were acting as “despachantes” (or dispatchers) in using their network of local and federal government officials to launder money. Through a network of front companies and business relationships, these individuals are able to move illicit proceeds “all around the world with ease,” including to the United States, South America, Europe, the Middle East, and China. For additional details on the overall scheme and role that each individual and front company played in the corruption and money laundering scheme, see OFAC’s press release.
As a result of these designations to the SDN List, all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. U.S. persons are generally prohibited from engaging in transactions with these sanctioned individuals and entities. In addition, any entities that are owned, directly or indirectly, 50 percent or more by the designated persons and entities are also blocked.