A Powerful Tool for Human Rights, Wrongly Used Against the ICC: The Actual Impact of Sanctions

[Sara Elizabeth Dill, Esq. is a partner at Anethum Global, a Certified Financial Crime Specialist & Certified Global Sanctions Specialist, and Arab Region Liaison Officer, International Bar Association War Crimes Committee.]

The original drafters of targeted and individualized sanctions regimes had the intent to pressure authoritarian dictators and human rights abusers to end their vile practices, through economic and financial pressures. Over the last decades, sanctions have been imposed on malign actors by the UN Security Council, the European Union, the U.S. Treasury Department, and various countries around the world. Sanctions compliance is a vital aspect of every financial institution and corporation with cross-border trade or finance. The threat of criminal prosecution for aiding and abetting sanctions violations results in third parties often erring on the side of caution.

In 2017, the United States adopted the Global Magnitsky Act to specifically target corrupt actors and human rights abusers. In December 2020, the European Union adopted a similar regime, allowing for asset freezes and travel bans for a broad range of human rights violations. Most recently, the EU and the USA engaged in a cooperative effort to sanction members of the Myanmar military and businesses providing material support to the coup and ongoing human rights violations.

The United States also recently announced the “Khashoggi Ban,” another sanctions regime that allows for visa restrictions on individuals or their family members, acting on behalf of a foreign government and engaged in activities that harass, suppress, surveil, threaten, or harm journalists, activists, and others.  

We have seen the impact of targeted sanctions on criminals, human rights violators, terrorists, and narcotics traffickers – making them unable to enter into business transactions, move currency between banks, travel freely, or purchase basic goods and services.

Despite the global focus on targeting human rights violators, in 2020 the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), based on an Executive Order of former U.S. President Trump, imposed sanctions on personnel from the International Criminal Court. Madame Prosecutor Fatou Bensouda became a specially designated national, or “SDN,” along with Phakiso Mocochoko, head of the Jurisdiction, Complementarity and Cooperation Division at the ICC. These economic sanctions were in addition to the already existing visa restrictions in place since 2019 on ICC personnel, including the specific revocation of Bensouda’s visa that would allow her to travel to the United States. The visa ban, announced by previous Secretary of State Mike Pompeo, indicated that the State Department would withdraw or deny visas to ICC personnel investigating U.S. military personnel for war crimes in Afghanistan.

The sanctions were imposed in response to Bensouda’s investigation of possible war crimes committed by United States military forces in Afghanistan, an action that the Executive Order deemed a national emergency and threat to national security. Whilst the Executive Order only mentions the situation in Afghanistan and the risk of prosecution of U.S. military personnel, the United States has expressed concerns and disagreement with the decision of the ICC to pursue its investigation into the situation involving Israel and Palestine.

Despite the Biden Administration’s focus on human rights and foreign policy, the sanctions against the ICC personnel remain in place. This means, at the most basic level, personnel are subject to travel bans and have restrictions on assets and financial transactions within the United States and abroad. The risk of criminal prosecution exists for anyone providing material support or assistance to SDNs.

Why is it so important that the Executive Order is rescinded and the sanctions are removed? Because of the serious detrimental effect on the ICC personnel that will continue for years to come.

The SDN designation means that the assets of the person or legal entity are blocked, and “U.S. persons” are prohibited from doing business with the SDN, facilitating financial transactions, and a long list of other prohibited acts. The definition of “U.S. person” is quite broad, including U.S. citizens and lawful permanent residents, U.S. companies incorporated in the U.S., their subsidiaries in other countries, any legal entity under the control of a U.S. citizen or company, or any person or corporation in possession of U.S. assets.

Inclusion on SDN lists also results in the person becoming a higher risk for financial transactions, loans, or other business transactions in other countries, as well as being subjected to additional screening or detention at airports throughout the world. Family members of sanctioned individuals may also be targeted or face difficulties as a result of being an associated person to the sanctions target.

Unlike some criminal laws that can be ignored or unenforced until they are amended or repealed, sanctions violations are strict liability offenses. Thus, banks and financial institutions must comply with the existing sanctions orders and refuse to process transactions, or freeze assets. OFAC fines can reach as high as $250,000, and an intentional violation of a sanctions order carries a maximum sentence of thirty years in prison upon conviction.

Although the EU and other jurisdictions have criticized the sanctions, there are still limits on those individuals who are targets or SDNs. Given the penalties and lack of defenses for sanctions violations under U.S. law, it is unlikely that institutions falling within U.S. jurisdiction would knowingly and willingly evade sanctions. Challenging the legality of the sanctions is not a defense. Additionally, most institutions utilize automatic transaction scanning programmes, meaning that even an attempted transaction, scanned by software for names, passport numbers, or other identifying information, would result in a “hit” or “target match,” and halt the process, resulting in the freezing or blocking of assets.

Nor does the designation simply disappear once Madame Bensouda leaves office in a few months. The designation is in her individual capacity, as a person, and thus will remain until it is revoked and her assets will be blocked, bank accounts will remain frozen, and she will be unable to use credit cards or other assets with connections to the U.S. or from banks handling U.S. dollar transactions. For example, should Bensouda receive an invitation to speak at a conference in the United States, any attempts to wire or transfer funds to reimburse her for travel or speaking fees would be blocked. Additionally, any international banks or financial institutions with branches or offices or parent companies in the United States with robust compliance programs would be unlikely to process any transactions whilst she remains on the list given that an initial search would indicate a match to a sanctions target.

There is a process to request “de-listing,” but this is a lengthy process before OFAC, with limited procedural protections or deadlines. Litigation is also pending before U.S. Federal Courts challenging the Executive Order, including one lawsuit brought by the Open Society Justice Initiative. However, given the lengthy process of an OFAC request and the slow-moving federal dockets, the best and most appropriate course of action would be for President Biden to rescind the order and direct OFAC to de-list any ICC personnel on the SDN list.

Of additional concern is the potential for other ICC personnel, including the incoming prosecutor Karim Khan, QC, to be added to the SDN list as long as the Executive Order remains in place. Any lawyers or investigations assisting the ICC continue to be at risk.

Recent news reports indicate that the Biden Administration is planning to remove the sanctions and SDN listing in the coming weeks. We can only hope that if this administration is as dedicated to human rights and leading by example as it proclaims to be, that the sanctions will be removed and future ICC personnel will be able to continue their pursuit of investigating and prosecuting human rights violations without fear of unlawful sanctions or improper interference with their duties. Until the executive order is rescinded and de-listing is complete, pressure on the Biden Administration must continue at all levels. Going forward, the use of individualized and targeted sanctions should be confined to those who truly qualify under the law and are engaged in criminal activity or gross human rights violations, not human rights lawyers.