April 6, 2020

District court denies challenge to Iranian company’s SDN designation

On November 21, 2011, the Office of Foreign Assets Control of the US Department of the Treasury placed the Fulmen Company and Fulmen Group of Teheran, Iran, on the List of Special Designated Nationals, pursuant to Executive Order 13382.  In December 2018, Fulmen filed a complaint in US District Court for the District of Columbia, seeking a declaratory judgment or injunctive relief, and money damages against OFAC and the Department of the Treasury.  Fulmen claimed that it had been placed on the European sanction list under false allegations in June 2010, and that its placement on the US SDN list was a result of reciprocity between the sanctions regimes, and not due to any independent considerations by OFAC.  The company provided evidence that its designation under the EU sanctions regime was annulled by the General Court of the European Council, and that the annulment and removal from the European sanctions list were affirmed by the European Court of Justice in 2013.  Thereafter, according to the complaint,  Fulmen attempted unsuccessfully to resolve the matter administratively.

In its complaint, Fulmen alleged violations of its procedural and substantive due process rights and property rights under the Fifth Amendment of the US Constitution and the Administrative Procedure Act.  In a memorandum opinion granting the defendants’ motion to dismiss, the court held that Fulmen did not have standing to assert constitutional claims, because, as a non-resident alien, it is not entitled to the protection of the Fifth Amendment.  The court held, further, that Fulmen’s assertions under the APA must also fail, as OFAC’s designation of Fulmen neither exceeded the agency’s statutory authority, was unwarranted by the facts, or was arbitrary or capricious.

Memorandum Opinion | Complaint