Financial Crime World

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U.S. Tightens Financial Screws on Ethiopia with Strict Sanctions Enforcement

The United States government has taken a tough stance against Ethiopia, implementing strict financial sanctions to curb human rights abuses and humanitarian crises in the East African nation. The move is aimed at crippling the country’s ability to fund its controversial activities, including alleged atrocities committed by government forces.

OFAC Issues Guidance on Sanctions Compliance

The Office of Foreign Assets Control (OFAC), a department within the U.S. Treasury Department, has issued detailed guidance on how individuals and businesses can comply with the sanctions regime. The agency has compiled hundreds of frequently asked questions (FAQs) to help clarify its policies and regulations.

Licensing Policy for Authorized Activities

Certain economic activities related to Ethiopia are allowed if licensed by OFAC. Businesses seeking authorization must apply online through the OFAC website. The agency issues general licenses to authorize specific activities, allowing all U.S. persons to engage in permitted transactions without needing a specific license.

OFAC has issued guidance on licensing policies related to Ethiopia, including the release of limited amounts of blocked funds for payment of legal fees and costs incurred in challenging the blocking of U.S. persons in administrative or civil proceedings. The agency’s regulations are codified in the Code of Federal Regulations (CFR) and published in the Federal Register.

The Ethiopia-related sanctions program is based on multiple legal authorities, including executive orders issued by the President, public laws passed by Congress, and United Nations Security Council Resolutions. Key regulations include Executive Order 14046, which imposed sanctions on certain individuals and entities connected to the humanitarian and human rights crisis in Ethiopia.

Background

The U.S. government has been increasingly concerned about human rights abuses and political instability in Ethiopia, particularly since the country’s Nobel Peace Prize-winning Prime Minister, Abiy Ahmed, came to power in 2018. The sanctions regime is designed to pressure the Ethiopian government to address these concerns and restore stability to the region.

Consequences of Non-Compliance

Failure to comply with OFAC regulations can result in severe penalties, including fines and imprisonment. Individuals and businesses are advised to carefully review OFAC’s guidance and regulations to avoid running afoul of the sanctions regime.

Conclusion

The U.S. government has made it clear that it will not tolerate human rights abuses or political instability in Ethiopia. The strict financial sanctions enforcement is designed to cripple the country’s ability to fund its controversial activities, while also protecting U.S. interests and promoting stability in the region.