These individuals or entities are further defined as “A foreign person that ‘constitutes a significant transnational criminal organization (TCO);’ Any person that has materially assisted or supported any person whose property interests are blocked pursuant to the EO; Any person ‘owned or controlled’ by, or acts on behalf of, a person or entity whose interests in property are blocked pursuant to the EO.”
Prior to this order, OFAC wasn’t able to use its power on commercial organizations. The ability to place this designation on corporations meant that OFAC could freeze their domestic assets. The US government, of course, cannot force banks and companies in other countries to stop dealing with the companies on OFAC’s list, but this effectively limits these organizations from operating stateside.
In comparison, in 2012, the US government said that HSBC was laundering money (over $800 million dollars). The London-based bank, which in contrast to PacNet, was alleged to be directly engaged in laundering activities. They reached a $1.9 billion settlement to settle the issue and were able to avoid the TCO designation and sanctions that were levied on PacNet.
