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Understanding the Impact of Illicit Drug Trade Sanctions Regulations

  • The Department of the Treasury's OFAC has implemented regulations based on Executive Order 14059, aimed at individuals engaged in the global illicit drug trade.

  • These regulations focus on designating and blocking individuals' properties connected to the illicit drug trade, amplifying enforcement and impact beyond designated persons to entities with significant interests, aiming to curb global drug-related activities.

In a significant move to combat the global illicit drug trade, the Department of the Treasury's Office of Foreign Assets Control (OFAC) is set to implement Executive Order 14059 through the publication of regulations. The aim is precise: to impose sanctions on foreign individuals involved in this pervasive and damaging trade.

Scheduled for publication in the Federal Register on December 20, 2022, these regulations mark a pivotal moment in the pursuit of curbing drug-related activities worldwide. Executive Order 14059, issued on December 15, 2021, serves as the bedrock for these forthcoming regulations, designed to address the complexities of the illicit drug market.

Overview of the Regulations

The core of these regulations lies in the identification and designation of individuals connected to the illicit drug trade. The process involves publishing the names of designated or blocked persons in the Federal Register, subsequently incorporating them into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List). This integration is accompanied by specific identifier formulations, such as “[ILLICIT-DRUGS-EO]-EO[E.O. number],” to ensure clarity and traceability.

Notably, the regulations encompass provisions for persons whose property and interests are blocked pending investigation, further amplifying the scope of action against illicit drug trade involvement.

Understanding Designations and Their Impact

A crucial facet highlighted within these regulations is the impact on entities directly or indirectly related to the designated persons. Individuals with a 50 percent or greater interest in such entities will also find their properties and interests blocked, effectively broadening the enforcement net and reinforcing the seriousness with which these sanctions are executed.

Final Thoughts

The forthcoming implementation of the Illicit Drug Trade Sanctions Regulations marks a significant step forward in combating the global ramifications of drug-related activities. With a comprehensive approach that includes identification, designation, and subsequent actions against implicated individuals and entities, these regulations underscore a concerted effort to curtail the pervasive impact of the illicit drug trade.

Stay updated and compliant with the evolving landscape of these regulations by accessing the necessary resources provided by OFAC, ensuring a proactive stance in navigating these critical sanctions.

Stay informed and ahead of the curve in the dynamic world of sanctions

As a Compliance Officer or Chief Compliance Officer, understanding how sanctions regimes work is vital to mitigating the risk of non-compliance in your organization.

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