On August 6, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated Tabacalera del Este SA (“Tabesa”), a Paraguayan tobacco company, for providing financial support to Horacio Manuel Cartes Jara (“Cartes”), the former president of Paraguay who was designated by OFAC in 2023 under Executive Order 13818 for his involvement in corruption. Tabesa had previously been designated in the United States for being an entity that Cartes owned or in which he owned a 50 percent or greater interest. However, OFAC reported that Cartes recently agreed to sell his interest in Tabesa, and since that time, Tabesa has allegedly made payments to Cartes and plans to continue to make payments despite his designation. Because of this, OFAC has designated Tabesa under EO 13818, which builds upon and implements the Global Magnitsky Human Right Accountability Act and targets those who engage in serious human rights abuse and corruption around the world.
As a result of this designation, all property and interests in property of the designee within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving the designated person. In addition, entities owned 50 percent or more by one or more designated persons are also blocked, unless they are exempt or authorized by a general or specific license issued by OFAC. In Tabesa’s case, OFAC emphasized that certain licensed activities would continue to be authorized pursuant to General License 7 under the Global Magnitsky Sanctions Regulations.