The Office of Foreign Assets Control (“OFAC”) today announced that it was adding the Export Development Bank of Iran (“EDBI”) to its list of Specially Designated Nationals and Blocked Persons. The effect of the designation is to freeze all assets of the bank in the United States now or in the future. According to the press release issued in connection with the designation, the Iranian bank is assisting the Government of Iran in connection with its nuclear proliferation activities.

More interesting than yet another Iranian bank designation was OFAC’s simultaneous designation of EDBI’s Venezuelan subsidiary Banco Internacional de Desarrollo. The name of the Venezuelan subsidiary is perilously similar to the Banco Interamericano de Desarrollo, otherwise known as the Inter-American Development Bank, an international banking organization just blocks away from the Treasury Department in Washington, D.C. To make the situation worse, a Google search on “Banco Internacional de Desarrollo” returns the Banco Interamericano de Desarrollo as its first result.

The possibility of confusion, as well as the desire to avoid about 4 million calls to the OFAC hotline, led OFAC to take a step so far unprecedented on the SDN list: it specifically noted that the designation did not cover the Banco Interamericano de Desarrollo. Here’s the entire designation:

BANCO INTERNACIONAL DE DESARROLLO, C.A., Urb. El Rosal, Avenida Francisco de Miranda, Edificio Dozsa, Piso 8, Caracas C.P. 1060, Venezuela; RIF # J294640109 (Venezuela); SWIFT/BIC IDUNVECA; Banco Internacional de Desarrollo, C.A. is a separate and distinct entity from Banco Interamericano de Desarrollo, known in English as the Inter-American Development Bank (IADB), and from Banco Desarrollo Economico y Social De [sic] Venezuela (BANDES), an entity owned by the Government of Venezuela [NPWMD]

And, as you can see, OFAC also gave a “Get Out of Jail Free” card to the somewhat less similarly named Banco Desarrollo Economico y Social de Venezuela. These preemptive exclusions are, to my knowledge, unprecedented on the SDN list.

OFAC has been subject to substantial criticism that it is easier for an SDN to remove itself from the list than for an innocent party with the same or similar name to an SDN to obtain from OFAC an official clarification that the innocent party isn’t on the list. This unusual new designation substantially erodes OFAC’s claim that cases of mistaken identity aren’t its problem.

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