The U.S. Treasury Department is reaffirming its sanctions against Rheingold Edelmetall even under the newly installed administration of President Donald J. Trump.

In new court filings seen by finews.com, the Office of Foreign Assets Control (OFAC), acting on behalf of Treasury Secretary Scott Bessent, defends the sanctions imposed under former President Joe Biden and his Treasury Secretary Janet Yellen.

Legal Background

The legal battle between the Treasury and Rheingold Edelmetall, a former heavyweight in the Liechtenstein precious metals industry owned by Axel Diegelmann, has now lasted over a year.

In February 2024, OFAC designated the company and several other companies and members of the Diegelmann family under its Specially Designated Nationals and Blocked Persons List (SDN list). The sanctioned parties responded by filing a lawsuit in the U.S. District Court for the District of Columbia, as previously reported by finews.com.

Appeals Case Now Underway

In November, District Judge James E. Boasberg – known for his ruling in a high-profile deportation case under the Trump administration – dismissed the lawsuit, as finews.com reported. The gold traders promptly filed an appeal.

The case is now before the U.S. Court of Appeals for the District of Columbia Circuit. The first round of written briefs has been completed. Any hopes that the Trump administration might take a softer stance than its predecessor appear unfounded so far.

Little New on the Merits

Substantively, the briefs reveal few surprises. Both sides are standing firm in their arguments.

The appellants argue that the lower court failed to properly assess their exculpatory evidence and explanations. As in the original case, they claim they were never informed by OFAC of the specific conduct that led to their designation. They suspect the agency is applying a non-industry-standard definition of the term «procurement» in the context of Russian precious metals.

Who Counts as a Russian Client?

The appellants deny conducting business with Russian counterparties after the outbreak of the war in Ukraine. They concede only that some of their clients residing in Liechtenstein may hold Russian passports, though they live outside of Russia.

They also argue that denying them access to the full administrative record, along with the potentially retroactive application of sanctions to pre-Ukraine invasion activity, violates basic principles of due process.

Is Everyone a Potential SDN?

Indeed, Executive Order 14024—originally issued by President Biden and since upheld by President Trump—defines the scope of sanctionable conduct in exceptionally broad terms.

It authorizes sanctions against anyone who «operates or has operated in the technology sector or the defense and related materiel sector of the economy of the Russian Federation, or any other sector of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.»

Wide Discretion Left to OFAC

Whether someone is actually designated is left to the discretion of the agency.

On the face of the Executive Order, any large precious metals trader, logistics provider, or bank with past Russian business ties could potentially be listed—an enormous margin of discretion that Judge Boasberg upheld in the initial ruling.

«No Overwhelming Evidence»

While Boasberg noted that the evidence in the classified administrative record—unavailable to the plaintiffs and their counsel—is «not overwhelming», he still found the designation lawful within the wide latitude of the Executive Order.

In its latest brief, OFAC accuses the Diegelmann entities of «knowingly and voluntarily procuring gold and other precious metals on behalf of Russian clients», thereby providing services to a strategic sector of the Russian economy.

Important Constitutional Questions

The agency asserts that providing precious metals services to Russian nationals outside of Russia constitutes participation in the Russian raw materials sector as defined in the Executive Order.

The appeal raises important constitutional questions in the context of U.S. administrative law. The plaintiffs are explicitly invoking Loper Bright Enterprises v. Raimondo, a recent U.S. Supreme Court decision that challenges longstanding judicial deference to federal agency fact-finding.

Evidence: Public and Classified

Diegelmann’s legal team argues the court must independently assess the factual basis for OFAC’s sanctions—a step Judge Boasberg declined to take.

OFAC rejects the charge of insufficient evidence. According to the U.S. government, the administrative record includes both public and classified materials that were reviewed by the judge. Releasing the classified information, OFAC states, would «risk compromising intelligence sources and methods.»

Reconsideration Request Filed

As to procedural fairness, the Treasury says the designated parties were given the opportunity to respond and submit a petition for delisting—which they did.

That petition is still under review, in parallel with the ongoing court proceedings.