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OFAC Investigation Lawyer

The Treasury Department’s Office of Foreign Assets Control (OFAC) may issue an enforcement response or launch an investigation based on suspected sanctions violations. An OFAC investigation may result from (1) a voluntary self-disclosure on sanctions violations (2) reports of blocked property or transactions rejected due to sanctions regulations; (3) a referral from U.S. law enforcement agencies or foreign governments cooperating to enforce U.S. sanctions; (4) information publicly accessible; and (5) information provided by informants.

In the event of an OFAC investigation or enforcement action, you will be expected to pull information and supporting documents from your sanctions compliance records. U.S. law requires that sanctions-related records be maintained for a minimum of five years. OFAC guidelines provide for penalties up to $50,000 for failing to maintain such records in accordance with OFAC regulations. We recommend that you consult with OFAC Sanctions Lawyers at the Zarkesh Law Firm, P.C., immediately if you have received an administrative subpoena from OFAC and have failed to maintain the relevant records at issue.

WHAT CAUSED MY OFAC INVESTIGATION?

Plenty of situations can cause OFAC to come knocking.

Despite the severe penalties associated with sanctions violations, a large chunk of OFAC enforcement actions and investigations involve individuals and organizations engaged in international business that have failed to establish an internal sanctions compliance program. If you are subject to OFAC’s jurisdiction and engage in international business, we strongly urge that you have a formal sanctions compliance program to avoid the possibility of future investigations and enforcement actions by OFAC.

Improper due diligence may also lead to an OFAC investigation. Use of general KYC (“Know Your Customer”) practices and compliance software, in combination with a general understanding of OFAC regulations, may greatly reduce the chances of engaging in business with partners or customers that are blocked by OFAC. Outdated information and software can play a role in faulty due diligence tactics.

Manufacturers or sellers subject to OFAC’s jurisdiction must be aware of the end-user of their products when dealing with U.S.-origin goods, technology, and services. For instance, you or your organization may be investigated and could face serious penalties for being willfully blind, where your buyers have the intent to re-sell or confer the benefit of the technology or services rendered to blocked entities or countries.

Click here to read more about some of the root causes of OFAC sanctions violations and the subsequent investigations and enforcement actions.

WHAT MAY HAPPEN IF I AM UNDER INVESTIGATION BY OFAC?

Like a court case, you or your organization will initially defend yourselves against an opposing party, in this case, the United States government. However, you will deal with an OFAC Enforcement Officer assigned to your case in an administrative proceeding instead of a prosecutor in a criminal court.

An OFAC investigation may lead to no action. OFAC may take no action in enforcing sanctions regulations where there is little evidence to amount into a violation. In such cases, OFAC will provide notice that the investigation is being concluded with no action by the Agency.

However, if OFAC decides against imposing penalties for whatever reason, they may instead send a cautionary letter. Cautionary letters are sent where OFAC concludes that insufficient evidence exists to amount into a violation of U.S. sanctions but believes that the same or similar conduct could lead to a violation in different conditions. These letters serve as a general warning to individuals or organizations who lack an internal compliance program and employ inadequate due diligence tactics.

OFAC may request further information if it believes you may possess valuable information on an apparent violation of U.S. sanctions. OFAC generally requests further information through an administrative subpoena and decides on pursuing enforcement action after reviewing the provided information.

OFAC will issue a Finding of Violation as a final enforcement response to a violation of U.S. sanctions. This is generally issued where OFAC decides against imposing a civil monetary penalty. Recipients of a finding of violation can also respond to OFAC’s determination.

If the Agency determines that a violation of sanctions has occurred, OFAC may decide that the offense warrants the imposition of the civil monetary penalty. The individual or organization on which the penalty is imposed also may submit a response to OFAC before the penalty is finalized.

When OFAC considers an individual or organization’s conduct to be particularly disturbing, the Agency reserves the authority to refer matters to law enforcement agencies for criminal investigation and prosecution. The pursuit of criminal charges, however, does not bar OFAC from also enforcing civil monetary penalties or any other administrative actions.

Lastly, OFAC may order an entity to cease and desist from sanctionable conduct, deny or withhold, suspend, or revoke any existing authorizations (e.g. specific licenses) formerly provided by OFAC.

CAN I APPEAL OFAC’S DETERMINATION?

After OFAC provides a letter enclosed with its determination, you may respond to OFAC before the determination becomes final.

OFAC may determine that the violation of U.S. sanctions was severe enough to justify imposing penalties. In that case you will have the opportunity to directly request reconsideration of the decision by OFAC. Alternatively, the appeal could also be taken through federal court. But an appeal in federal court has an uphill battle since U.S. courts defer to determinations made by federal agencies like OFAC.

DO I NEED AN ATTORNEY TO HANDLE AN OFAC INVESTIGATION OR ENFORCEMENT ACTION?

Hiring an experienced attorney specialized in the field of OFAC Sanctions is the recommended course of action upon receiving an administrative subpoena from OFAC. An OFAC Sanctions Lawyer will provide professional services that include drafting a comprehensive written response and compiling relevant supporting documents for submission to OFAC.

Any information provided to OFAC may be referred to other enforcement agencies for criminal investigation and possible prosecution. Your submission to OFAC should be narrowed, tailored to the questions asked, and brief to provide accurate, satisfactory answers while avoiding exposure to further unnecessary scrutiny. Read more about responding to an OFAC administrative subpoena here.

WHY SHOULD WE HIRE YOUR FIRM?

Our team in Washington, DC has a great deal of knowledge traversing OFAC enforcement investigations and proceedings. Confusing compliance matters and misinterpreting sanctions regulations can lead to serious violations of OFAC law. The violation of U.S. sanctions and the subsequent penalties often turn public and as a result, have the potential to cause serious reputational damage.  Working with the OFAC Sanctions Lawyers at the Zarkesh Law Firm P.C. means having trusted counsel on your team to navigate the inner workings of the administrative bureaucracy at OFAC.

Our diverse clientele includes companies and individuals from all parts of the world, spanning multiple industries and professions, from both the private and public sector.

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