Industry News

OFAC Violations Will Cost More

Jan. 17, 2023
By: Marvin E. McPherson


Sanctions violations in the United States can now cost you more. Office of Foreign Assets Control (OFAC) amended its maximum amount of the civil monetary penalties to adjust for inflation. Pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.

- Trading With the Enemy Act (TWEA); from $97,529 to $105,083

-          International Emergency Economic Powers Act (IEEPA); from $330,947 to $356,579

-          Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA); from $87,361 to $94,127

-          Foreign Narcotics Kingpin Designation Act (FNKDA); from $1,644,396 to $1,771,754

-          Clean Diamond Trade Act (CDTA); from $14,950 to $16,108

Besides the yearly inflation adjustment OFAC has increased its recordkeeping penalties to the civil monetary penalties (CMP) as well. Using an exemption in the FCPIA Act, which expressly exempts changes to recordkeeping CMPs from the notice and comment requirements of the Administrative Procedure Act. The final rule effective January 13, 2023 increases the penalties for the following violations;

-          Failure to furnish information pursuant to 31 CFR 501.602 irrespective of whether any other violation is alleged.

-          Failure to furnish information pursuant to 31 CFR 501.602 where OFAC has reason to believe that the apparent violation(s) involves a transaction(s) valued at greater than $500,000, irrespective of whether any other violation is alleged.

-          Late filing of a required report, whether set forth in regulations or in a specific license, if filed within the first 30 days after the report is due.

-          Late filing of a required report, whether set forth in regulations or in a specific license, if filed more than 30 days after the report is due.

-          Late filing of a required report, whether set forth in regulations or in a specific license, if the report relates to blocked assets, an additional CMP for every 30 days that the report is overdue, up to five years.

-          Failure to maintain records in conformance with the requirements of OFAC’s regulations or of a specific license.

As such it is important to ensure that all records are maintained in accordance with all laws, otherwise could prove to be a costly mistake. If you have any questions regarding record keeping in general or the length in which certain records must be kept in specific, do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.