OFAC Issues Guidance On Sanctions Risks In The Art Scene

In December 2019, the United States blacklisted one of the top donors to Hizballah—Nazem Said Ahmad—as a result of financial support he had provided to the terrorist group.¹ OFAC cited Ahmad's personal and "extensive art collection worth tens of millions of dollars," which he purportedly used to "mitigate the effects of U.S. sanctions," as well as his Beirut-based art gallery which served as a front for money laundering.² Ahmad invested money in Warhols and Picassos, which are high-value, fungible assets that are easy to exchange without drawing attention. Ahmad purportedly was able to skirt his blacklisted status in part by exploiting certain long-standing practices of the art world—practices that have now come under fire by U.S. regulators.