August 17, 2020

Latvian mayor challenges OFAC sanctions in DC federal court

On August 11, 2020, Latvian Mayor Aivars Lembergs filed a complaint to contest economic sanctions imposed by the US Department of Treasury’s Office of Foreign Assets Control against him, alleging that the accusations against him are false, libelous, and an attempt by Latvian political rivals to tarnish his reputation.  Lembergs filed for declaratory and injunctive relief against OFAC and its Director, Andrea Gacki, in the US District Court of the District of Columbia, seeking an order vacate, rescind and declare his designation unlawful, as well as costs and attorneys’ fees.

On December 9, 2019, Lembergs was designated by OFAC based on allegations that he was engaged in corruption, for offenses such as money laundering, bribery and abuse of office since he became mayor in 1988, pursuant to Executive Order 13818 dated December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption,” implementing the Global Magnitsky Human Right Accountability Act.  OFAC contemporaneously designated four Latvian-based companies alleged to be owned or controlled by Lembergs.

According to the complaint, Lembergs accuses political rival, Latvian Vice Prime Minister and Minister of Justice Janis Bordans, with sharing false information with OFAC and other US government entities that led to his designation.  Lembergs not only challenges the allegations against him, but asserts that if any conduct did occur, it was not continuous, had no relationship to the designation criteria in E.O. 13818, and predated the issuance of E.O. 13818.  He also alleges that he does not own or have a controlling interest in the four companies that were designated. 
Lembergs also alleges in the complaint that he and his family have suffered undue financial, social, and reputational harm as a result of his designation, including a loss of income from the four designated companies, termination from several political and non-governmental organizations, and a loss of access to funds and many basic services, as all bank accounts for Lembergs and his family have been frozen.

Lembergs Complaint