New developments in the case of the Liechtenstein gold dealers sanctioned by the American Office of Foreign Assets Control (OFAC): after the affected gold dealers sued the US authorities, including Treasury Secretary Janet L. Yellen, as finews.com previously reported, the authorities have now responded to the lawsuit.

A month ago, signs pointed to relaxation. The parties, namely the sanctioned individuals on one hand and the sued authorities and officials on the other, agreed to extend the deadline for the response to the lawsuit by one month to allow for direct talks or negotiations.

Deadline Expired

This deadline expired last Thursday. Rheingold Edelmetall in Triesen, its sister company of the same name in Germany, and the three members of the founding family – father Axel Paul Diegelmann and his sons Fritz and Bernd Günter – remain on the OFAC’s Russia sanctions list.

The authorities and officials sued by the Diegelmanns have responded to the lawsuit on time. Thus, the case now differs from that of former Goldman Sachs banker Elena Titova and a former manager of Russia's Otkritie Bank named Andrey Golikov.

OFAC Takes It to Court

The same law firm that now represents the Diegelmann network previously applied pressure on the authorities with a lawsuit – successfully. OFAC removed Titova and Golikov from the sanctions list just a month after the lawsuit was filed. Thus, there was no trial.

In contrast, it now appears that OFAC is willing to go to court in the case of the Liechtenstein gold dealers.

Reference to Press Release

The response to the lawsuit, filed by Stephen M. Elliott (Senior Trial Counsel at the U.S. Department of Justice) on July 18, 2024, with the Federal Court for the District of Columbia, provides no new information on the facts of the case; it merely refers to the OFAC’s press release.

The 16-page document essentially confirms the facts: that certain business connections with Russia were sanctioned by OFAC based on a presidential decree, that the Diegelmann network was sanctioned by OFAC on February 23, 2024, in this context, that it operated a gold trade in Liechtenstein, and that the sanctioning resulted in severe restrictions for those affected.

Lack of Evidence

However, the response remains silent on the exact accusations against the sanctioned individuals and does not provide evidence for the factual basis of the sanctions.

In this regard, the response only refers to OFAC FAQs, which state that «any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation» will be sanctioned.

Generic Text Blocks

The legal filing mainly consists of generic text blocks. Many claims from the Diegelmann lawsuit are generally characterised as «disputed» without further explanation.

The response also refrains from making an explicit legal request, particularly from asking the judge to dismiss the case. At the end, it merely states that the Defendants «aver that Plaintiffs are not entitled to any relief.»

Showdown Expected

Thus, the case is expected to occupy the Federal Court for the District of Columbia for some time. Chief Judge James E. Boasberg ordered the parties to submit a joint proposed briefing schedule by August 1st.

At some point, OFAC will likely have to show its hand regarding the evidence it holds against the Diegelmann network.