DC Circuit Says OFAC Can Simultaneously Sanction Tiers 1 and 2 Narcotics Traffickers

The U.S. Court of Appeals for the D.C. Circuit on March 12 affirmed a federal D.C. court's dismissal of Venezuelan national Samark Jose Lopez Bello's suit against his designation as a narcotics trafficker under the Foreign Narcotics Kingpin Designation Act (Samark Jose Lopez Bello v. Andrea M. Gacki, D.C. Cir. # 21-01727).

Judges Sri Srinivasan, Karen Henderson and A. Raymond Randolph ruled that, under the Kingpin Act, the Treasury Department's Office of Foreign Assets Control can list a "Tier 2" trafficker at the same time it designates a "Tier 1" trafficker. The judges also dismissed a host of due process claims from Lopez Bello, finding that the Kingpin Act gave him "adequate notice" of sanctionable conduct.

Tier 1 traffickers are "those who play a significant role in international narcotics trafficking" while Tier 2 traffickers are "those who materially assist" Tier 1 traffickers. Lopez Bello was listed as a Tier 2 trafficker in 2017 along with Tier 1 trafficker Tareck Zaidan El Aissami for serving as El Aissami's "frontman" and handling his business arrangements.

Suing over his designation, Lopez Bello said the "plain language" of the Kingpin Act and the act's "legislative history" prevent OFAC from listing a Tier 2 trafficker at the same time as a Tier 1 trafficker. The court disagreed, saying the best reading of the statute allows "simultaneous designation" of Tier 1 and Tier 2 traffickers.

The Kingpin Act allows Tier 2 designations against people aiding foreign drug traffickers or others sanctioned by Treasury. It doesn't require that those traffickers be "'previously' or 'already' designated," the opinion said.

Lopez Bello argued that the statute imposed this requirement, though the court said it rejected a similar claim in Rural Cellular Association v. FCC. The court also said not taking immediate action against Tier 2 traffickers would create a "substantial risk of asset flight," hamstringing the Kingpin Act, the opinion said.

Lopez Bello also said simultaneous designation of Tier 1 and Tier 2 traffickers deprives designated parties of fair notice of sanctionable conduct and violates the Constitution's due process clause. The court found the Kingpin Act to set a "discernible standard that is reasonably comprehensible to the public." The Tier 2 provisions don't require a Tier 2 trafficker to "knowingly" or "recklessly" assist or support a Tier 1 trafficker.

"The Congress’ omission of a mens rea requirement carries great weight here because other provisions in the Kingpin Act do have heightened mens rea requirements," the court said. "The Act’s criminal penalties apply only to persons who 'willfully' or 'knowingly' violate the Act.” The term "narcotics trafficking" is also defined with "specificity," putting the public "on notice" that Kingpin designations can happen even if the designated party lacks a "specific mens rea," the court found.

The court also said due process wasn't violated because OFAC gave Lopez Bello a "Blocking Memorandum," Federal Register notice, press release, redacted administrative record and unclassified summary of the confidential information. While the designation has a "dire" effect on private interests, the government has a "critical interest in protecting classified, privileged and law enforcement information," the opinion said. OFAC satisfied due process when it gave a trafficker the "unclassified evidence on which the agency relied and gave him an opportunity to respond," the court said.