Highlights
- The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has designated Colombia's sitting president, Gustavo Francisco Petro Urrego, under Executive Order 14059, which imposes sanctions on foreign persons involved in the global illicit drug trade.
- OFAC simultaneously designated three members of Petro's alleged support network – his spouse, his son and an alleged close associate – for providing financial, material or technological support to Petro.
- As a result, all property and interests in property of the designees that are in the United States or within the possession or control of U.S. persons are blocked, and dealings by U.S. persons (and transactions transiting the U.S.) involving such property are generally prohibited. Entities owned – directly or indirectly, individually or in the aggregate – 50 percent or more by one or more blocked persons are likewise blocked.
- U.S. and foreign companies, including financial institutions, may consider conducting an impact assessment and implementing responsive measures intended to mitigate sanctions-related risks.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on Oct. 24, 2025, designated the Republic of Colombia's sitting president, Gustavo Francisco Petro Urrego (Petro), pursuant to Executive Order (EO) 14059, which targets foreign persons involved in the global illicit drug trade. Pursuant to the same authority, OFAC also designated three members of Petro's alleged support network – his spouse, Veronica del Socorro Alcocer Garcia; his son, Nicolas Fernando Petro Burgos; and Colombia's Minister of the Interior, Armando Alberto Benedetti Villaneda – for allegedly providing financial, material or technological support to Petro.
As a result, all four individuals were added to OFAC's Specially Designated Nationals (SDN) and Blocked Persons List (SDN List). Accordingly, all property and interests in property of the designees that are in the United States or within the possession or control of U.S. persons are blocked, and dealings by U.S. persons (and transactions transiting the U.S.) involving such property are generally prohibited. Under OFAC's 50 Percent Rule, entities owned, directly or indirectly, 50 percent or more by one or more blocked persons are likewise blocked.
OFAC's action follows the Trump Administration's Presidential Determination on Sept. 15, 2025 designating Colombia under Section 706(1) and 706(2)(A) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228) (FRAA) as a "major drug transit country or major illicit drug producing country" that "failed demonstrably" to meet its drug control responsibilities during the previous 12 months. This marks the first time in more than 25 years that Colombia has been added to the "Majors List." This determination appears to part of a broader declared national emergency driven by transnational organized crime trafficking fentanyl and other illicit drugs into the U.S. – now claimed to be the leading cause of death for Americans ages 18 to 44 – with an average of over 200 drug-related deaths per day in 2024.
The determination also states that, pursuant to Section 706(3)(A) of the FRAA, the Trump Administration determined that U.S. assistance to Colombia is "vital to the national interests of the United States." This signals that the United States intends to recertify Colombia as a partner in counternarcotics efforts and continue assistance under 706(3)(A) in the next fiscal year.
The Trump Administration also stated that it is deploying all available authorities and resources to confront this threat and will consider changing the designation if Colombia undertakes more aggressive action to eradicate coca, reduce cocaine production and trafficking, and hold producers, traffickers and others benefiting from the production of cocaine responsible, including through improved cooperation with the United States.
Executive Order 14059
EO 14059 authorizes OFAC to sanction any foreign person who has engaged in, or attempted to engage in, activities that materially contribute to, or present a significant risk of contributing to, the international proliferation of illicit drugs or their means of production. It also covers any foreign person who has knowingly received property (or an interest in property) derived from the proceeds of such activity, or that was used, or intended to be used, to facilitate it.
In addition, EO 14059 authorizes sanctions on any foreign person who:
- has provided, or attempted to provide, financial, material or technological support, or goods or services, for the activities described above or for any sanctioned person
- who is, or has been, a leader or official of any sanctioned person or of any foreign person who has engaged in the activities described above
- who is owned, controlled or directed by, or has acted or purported to act, for or on behalf of, directly or indirectly, any sanctioned person
OFAC is further authorized to impose sanctions on any foreign person subject to Section 7212 of the Fentanyl Sanctions Act.
The Treasury Department's announcement framed the designations within a broader counternarcotics posture and cited record levels of coca cultivation and cocaine production in Colombia under President Gustavo Petro. This escalation signals potential follow‑on designations against enablers and facilitators, as well as complementary measures such as visa restrictions, which the U.S. Department of State already threatened against Petro last month.
Sanctions Implications
Upon designation, U.S. persons (including U.S. financial institutions) must block – rather than reject – any property and interests in property of the designees that come within the United States or their possession or control, and report such blocking to OFAC within 10 business days. Unless authorized by a general or specific license from OFAC, U.S. persons are generally prohibited from virtually all dealings involving the designees or their blocked property, and OFAC's 50 Percent Rule extends such blocking to entities owned – directly or indirectly, individually or in the aggregate – 50 percent or more by one or more blocked persons.
In addition, non‑U.S. persons are subject to increased risk of liability for causing, or conspiring to cause, U.S. persons to violate U.S. sanctions when transactions involve a U.S. nexus – such as U.S. dollar clearing, U.S.‑origin goods or use of U.S. financial institutions – or where conduct may constitute material support (i.e., secondary sanctions) to blocked persons.
OFAC may impose civil penalties on a strict liability basis for violations of U.S. sanctions, and criminal penalties may apply for willful violations.
Complying with the New Designations
U.S. companies and financial institutions should consider conducting an impact assessment to determine what exposure (if any) they directly or indirectly maintain to the sanctioned persons. This may include performing risk-based screening of their customers, counterparties, beneficial owners and payments against the updated SDN List, and taking appropriate measures to ensure the timely blocking and reporting of any property or interests in property of a designee. Given the obligations of foreign-based persons to comply with U.S. sanctions and export control laws described in the Tri-Seal Compliance Note issued by OFAC, the U.S. Department of Justice and Department of Commerce, non-U.S. persons or foreign offices, subsidiaries or branches of U.S. persons may consider implementing additional, enhanced remedial measures.
In light of the unprecedented designation of a sitting, democratically elected head of state of a country traditionally viewed as a close U.S. ally, U.S. and foreign companies (including financial institutions) should prepare for potential follow‑on actions targeting enablers across financial and logistics channels and conducting a risk-based review of Colombia‑related exposures. These actions may require financial institutions to evaluate their current politically exposed person due diligence and screening controls to identify current or future sanctions-related exposure. Additionally, parties that may have preexisting transactions, dealings or commercial relationships with the designees or entities they are affiliated with may consider whether presenting a specific license application or request for interpretive guidance from OFAC is appropriate for their circumstances. OFAC can also issue specific licenses to authorize particular transactions that may otherwise be prohibited by applicable sanctions.
Colombian Law Considerations
The inclusion of the President of Colombia and other individuals closely associated with him on the OFAC SDN List raises potential issues regarding the extra-territorial application of U.S. sanctions to persons in Colombia and may have practical effects under Colombian law, particularly for Colombian companies and financial institutions that engage in cross-border activities involving the U.S. or the U.S. financial system. Numerous international conventions, treaties and governmental agreements (including those between the U.S. and Colombia) as well as Colombian laws and jurisprudence may present issues that could impact the application of these sanctions to the Colombian legal framework and territory. Further, complex conflicts of laws issues may arise to the extent that Colombian companies or financial institutions seek to address the issues and risks presented by these designations locally in Colombia. Accordingly, parties that maintain Colombia exposure may consider performing a risk-based assessment grounded in Colombian law and supervisory expectations to mitigate the risks applicable to their specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
