Transactions with sanctioned persons are generally prohibited, the US Office of Foreign Assets Control (OFAC) has said.
The clarification comes as Guyanese banks face criticism over the closure of accounts linked to individuals associated with the We Invest in Nationhood (WIN) party, headed by sanctioned businessman Azruddin Mohamed.
OFAC, part of the US Treasury, sanctioned Azruddin and his father, Nazar Mohamed, on 11 June 2024 under Executive Order 13818, which implements the Global Magnitsky Human Rights Accountability Act. The Mohameds were sanctioned for alleged gold smuggling, tax evasion and corruption.
OFAC noted that US financial institutions are not barred from servicing non-sanctioned parties, but cannot process transactions or maintain accounts in which a sanctioned person has an interest. Non-US institutions also risk penalties if they provide “material support” to sanctioned individuals.
The agency offered this explanation in response to a query from Azruddin about the closure of accounts belonging to several WIN candidates.
The guidance provided by OFAC contradicts claims by the WIN party that OFAC had deemed the closures “unjust.” OFAC emphasised that it does not direct banks to override their internal compliance policies and procedures.
Financial analyst Joel Bhagwandin weighing in on the matter said the banks’ actions were consistent with both OFAC requirements and international anti-money laundering and counter-terrorism financing standards. “Banks must comply with global regulations to maintain correspondent banking relationships,” he said, noting that even minor lapses have caused institutions to lose such ties in the past.
Meanwhile, prominent attorney Sanjiv Datadin said the purpose of US sanctions is to strip corrupt actors and human rights abusers of financial influence. He warned that openly supporting sanctioned individuals, including through political activity, may amount to material support and expose supporters to risk.
The Mohameds, who have acknowledged self-funding WIN’s activities, have characterised the sanctions as politically motivated. Analysts, however, say banks and businesses that continue to engage with the family face serious compliance consequences.
