US Court Upholds OFAC's Refusal to Delist Former Guatemalan Official

The US District Court for the District of Columbia has dismissed a delisting claim brought by Luis Martinez Morales, granting summary judgment in favour of the US Office of Foreign Assets Control (OFAC). The ruling was issued in Martinez Morales v US Department of the Treasury, No. 24-2519.

Mr Martinez was designated in 2023 under the US Global Magnitsky sanctions programme, established by Executive Order 13818, over his role in the Guatemalan government for personal gain. OFAC declined his request to be removed from the list in 2025, and he took the matter to court under the Administrative Procedure Act. To succeed, he had to demonstrate that OFAC's decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" (5 USC §706(2)(A)).

The court rejected each of his arguments and sided with OFAC. It found that the designation complied with the International Emergency Economic Powers Act — the statute underpinning EO 13818 — noting that the order targets corruption worldwide, which encompassed Mr Martinez's conduct in Guatemala. The court also held that OFAC had not withheld its reasoning: the grounds appeared in the US Federal Register and in the agency's refusal letter, and redactions in the administrative record covered sensitive information without preventing Mr Martinez from mounting a challenge.

On the substance, the court concluded that the listing was neither arbitrary nor capricious, as his conduct provided a reasonable basis to find that he had engaged in corruption meeting the EO 13818 criteria. It further praised OFAC's review as thorough and well-reasoned — pointing out, for instance, that the dismissal of a Guatemalan corruption investigation against him was not decisive, since a foreign authority's decision does not bind OFAC's independent assessment under US sanctions law.

The judgment reinforces the substantial deference US courts afford OFAC in designation and delisting decisions, and confirms that a favourable outcome in a foreign jurisdiction will not automatically translate into relief from US sanctions.