On September 2, 2024, the U.S. Department of Justice announced that it had seized a Dassault Falcon 900EX business jet in the Dominican Republic, that allegedly was owned and operated for the benefit of President Maduro of the county of Venezuela. Citing the Executive Order signed in 2015 by President Obama, which blocked assets and property of current and former government officials of Venezuela, certain named individuals, and persons determined to be responsible for undermining democratic processes or institutions in Venezuela, violating human rights or limiting free expression; and theExecutive Order signed by President Trump in 2019, which blocked the assets and property of the Government of Venezuela generally, the DOJ alleged that the aircraft was acquired from a seller in the U.S. through a Caribbean-based shell company in late 2022 or early 2023, and was registered under a “T7” aircraft registration (which is the registry of theRepublic of San Marino—a tiny state on the Italian peninsula) and was flown nearly exclusively for the benefit of President Maduro.

The Executive Orders were issued under the authority of, among other federal laws, the International Emergency Economic Powers Act. The “IEEPA” is the same authority that President Biden has used on several occasions since the outbreak of hostilities between Russia and Ukraine in February 2022 to impose economic sanctions on the Russian government and individuals in the Russian Federation. The IEEPA allows the President to “regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.” These powers are extremely broad and apply to all U.S. citizens and permanent residents and all U.S.-organized entities, wherever in the world they happen to be located, and all persons or entities to the extent their actions occur inside the U.S.

Civil penalties for violating the sanctions can range up to $250,000 or, if more, twice the value of the transaction that was prohibited. Civil penalties do not require that the government prove intent or negligence in violating the sanction—attempts to conduct adequate diligence may mitigate the amount of such fines. Willful violations of sanctions result criminal penalties of up to $1,000,000 and imprisonment of up to 20 years.

In addition, blocked property subject to sanctions, or traceable proceeds, could be subject to seizure by the U.S. government, or outright forfeiture to the U.S. (i.e., your property or assets are now belong to Uncle Sam!). Besides Venezuela, sanctioned countries and nationals include Russia, Belarus, Crimea and Russia-aligned areas of Ukraine, Iran, Syria, and North Korea. Counterparties in every business aircraft transaction—as well as the aircraft itself—should be scrutinized to ensure that no one is dealing with a sanctioned person.

_{The information in this article is intended to highlight potential issues with aircraft ownership and operations and is therefore general in nature. Please feel free to contact one of our experienced aviation attorneys directly to discuss your specific business/personal needs.}