Sanctions against President Gustavo Petro: Compliance implications for organizations

Diaz Reus - On October 24, 2025, the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC") announced an unprecedented measure: the designation of Colombian President Gustavo Francisco Petro Urrego, along with several members of his inner circle, under Executive Order 14059, which authorizes economic sanctions against foreign persons involved in the global illicit drug trade.

Beyond the geopolitical impact of these sanctions, financial institutions and other organizations must consider the extraterritorial reach of the U.S. sanctions regime and the compliance risks they now face in their transactions involving Colombia.

This article describes the legal basis for the designation, its practical effects, and the compliance implications that both Colombian institutions and foreign institutions operating in Colombia should consider.

Legal basis for the designation

Executive Order 14059, issued in December 2021, authorizes the Department of the Treasury, under the authority of the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act (NEA), and the Fentanyl Sanctions Act (FSA), to block the property and interests of any foreign person who has materially contributed—or poses a significant risk of contributing—to the international proliferation of illicit drugs or the means for their production. The order also allows for the sanctioning of those who provide financial, material, or technological support to previously designated individuals or entities.

According to the OFAC statement, President Petro was designated for his alleged responsibility for the expansion of cocaine production in Colombia and for implementing policies that benefited narco-terrorist organizations.

Compliance implications for financial institutions and other organizations

As a result of the designations, all property and interests in property of the designated or blocked person that are in the United States, or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. In addition, any entity that is owned, directly or indirectly, individually or collectively, 50 percent or more by one or more blocked persons is also considered blocked. Unless expressly authorized by a general or specific license issued by OFAC, or in cases where an exemption applies, OFAC regulations generally prohibit any transaction involving property or interests in property of blocked persons.

Companies and financial institutions should bear in mind that the scope of OFAC sanctions extends far beyond the borders of the United States. U.S. persons are prohibited from engaging in transactions with designated entities, unless expressly authorized. Similarly, non-US persons are also prohibited from engaging in conduct that circumvents or evades US sanctions, as well as inducing or conspiring with US persons, knowingly or unknowingly, to violate such sanctions. Violations of the U.S. sanctions regime can result in civil or criminal penalties for both U.S. and foreign persons. In addition, foreigners risk being subject to OFAC sanctions if they engage in certain transactions or activities involving designated or blocked persons.