Operations preserved amid blocked-entity utility and fuel exposure
Situation:
A foreign mining company operating in a sanctions-sensitive jurisdiction needed to secure essential utilities and fuel to maintain production. The only available natural gas provider in the region was a blocked entity, creating immediate OFAC compliance risk across supply contracts, payment flows, guarantor exposure, and counterparty relationships. The client needed a defensible path forward that would withstand internal audit, bank scrutiny, and potential regulator review.
Stakes:
The company faced operational continuity risk if it could not lawfully procure fuel and utilities, including shutdown exposure, contractor disruption, and downstream contract defaults. Sanctions risk extended beyond the operating entity to guarantors and related parties, including potential SDN-related secondary impacts, payment interdiction, correspondent banking friction, and reputational fallout. A misstep could trigger blocked payments, account restrictions, escalations with financial institutions, and long-term compliance remediation.
Result:
Ferrari & Associates conducted an OFAC-focused risk analysis of the proposed arrangements, mapping the transaction structure, counterparties, ownership and control considerations, and payment routing to identify where blocking and facilitation risk could arise. The firm delivered a sanctions compliance advisory opinion that clarified how OFAC would likely evaluate the fact pattern, what controls and documentation were required, and how to structure the arrangement to reduce exposure. The client proceeded with essential operations using a documented, defensible compliance posture built around OFAC risk, record integrity, and continuity.
