Voluntary Self Disclosure Lawyer
If you are considering self-disclosing a possible violation of U.S. sanctions to OFAC, we strongly recommend that you work with a Washington DC Voluntary Self Disclosures Attorney who specializes in the field of OFAC law. Expert evaluation of your case means you will be advised on how to best proceed with your case and whether a voluntary self-disclosure (VSD) is necessary.
An individual or organization may submit a voluntary self-disclosure to OFAC where a sanctions violation occurred or was suspected to have occurred. A VSD could also be submitted if you or your organization that engaged in a transaction with a possible nexus to a sanctions target. The point of a VSD is to gain favor with OFAC for self-disclosing a potential sanctions violation in good faith. If it is determined that the conduct or transaction amounted to a violation, then OFAC will consider the voluntarily self-disclosure in a positive light when calculating the imposition of penalties.
HOW DO I START A VOLUNTARY-SELF DISCLOSURE?
We strongly recommend that you make sure the transaction was a violation before deciding to submit a voluntary self-disclosure to OFAC. Your first step is to review the sanctions regulation exemptions found in the statutory authorities, general licenses, and relevant interpretative guidance to determine whether the conduct was a violation. If it is ambiguous whether a violation occurred, it is best to consult an experienced Washington DC Voluntary Self Disclosures Attorney to evaluate your case.
We strongly caution you against submitting your own voluntary self-disclosure without adequate counsel and expert advice. When you hire your Washington DC OFAC sanctions attorney, s/he will help you assist you in submitting to OFAC an initial voluntary self-disclosure (discussed further below) that generally explains the issues and facts regarding the potential sanctions violation.
After the initial VSD, your Washington DC Voluntary Self Disclosures Lawyer will assist in your internal investigation and audits. This will require the attorney to interview and compile documents by work closely with the personnel/employees most involved and responsible for the conduct and/or transaction at issue.
IS SUBMITTING THE VOLUNTARY SELF-DISCLOSURE TIME SENSITIVE?
The whole point of a VSD is to beat OFAC to the punch. Your voluntary self-disclosure will be meaningless if OFAC independently discovers the violation prior to your submission. Considering this, you should work with an OFAC sanctions lawyer to file an initial self-disclosure accompanied with a written statement explaining that a more detailed and comprehensive filing will follow in the coming months.
Upon submitting the initial self-disclosure, you should work toward compiling a more detailed submission including all relevant information that OFAC would want to see. This way you will receive the recognition and credit for self-disclosing the violation without risking OFAC becoming aware prior to your initial submission. Your payout from this VSD, as discussed above, will be evident when OFAC calculates the monetary penalties for your violation (that is, if OFAC determines the conduct constitutes a violation).
It is important to note that if a bank or entity has a legal obligation to report sanctions-related issues to OFAC and does so accordingly prior to your initial disclosure, then you or your organization may lose the credit and benefits that are awarded for voluntary self-disclosures.
WHAT SHOULD I INCLUDE IN MY VSD?
OFAC’s enforcement guidelines detail the complex framework between VSD’s and OFAC’s enforcement actions. While OFAC allows for a brief initial voluntary self-disclosure, the subsequent VSD submission to OFAC must be “materially complete” and should not include any false or misleading information. A voluntary self-disclosure requires a thorough internal investigation and analysis of the sanctions regulations with consideration to you or your organization’s conduct. In general, a VSD submission to OFAC should include a facts section that narrates and provides the content to the conduct or transaction, a legal analysis using the relevant statutes and regulations, and a policy argument that covers why the conduct was not harmful to U.S. national security and foreign policy interests.
HOW DETAILED SHOULD THE VOLUNTARY SELF DISCLOSURE BE?
A voluntary self-disclosure should be “materially complete.” To receive the substantial benefits of a VSD, you must provide the most thorough details as they are discovered while remaining responsive to OFAC’s follow-up questions. The goal is to cooperate substantially in the eyes of the OFAC officers responsible for your case.
You should work with a Washington DC Voluntary Self Disclosures Attorney to ensure that your filing meets OFAC’s “good faith” standard. This means your VSD should not include any false or misleading information. A mere mistake in the provided facts, for instance, may result in receiving no substantial benefit from the VSD. However, in cases where false or misleading information is included in the submission, OFAC will consider the totality of the circumstances when deciding whether the disclosing party should receive credit for the VSD.
Lastly, work with your OFAC attorney to draft, improve, and implement a sanctions compliance program that could be mentioned in detail in the VSD submission. OFAC wants to see that this close call and/or violation, whether it results in a cautionary letter or enforcement action, was a lesson to you, your employees, and your organization. OFAC has begun to emphasize the need for internal sanctions compliance programs for companies who do business across abroad. Due to this, OFAC may penalize a self-disclosed violation that is rooted in the absence of an effective sanctions compliance program. On the other hand, however, OFAC favors and provides credit to disclosing parties for taking remedial actions to strengthen their internal sanctions compliance program in an effort to prevent future violations of U.S. sanctions.
WHAT WILL BE THE RESULT OF MY VOLUNTARY SELF-DISCLOSURE?
OFAC provides a framework in the enforcement guidelines for OFAC officers to use in their decision-making and calculating penalties against violators of U.S. sanctions. Ideally, a comprehensive VSD submission would result in either OFAC taking no action, finding that there was no violation or issuance of a cautionary letter. As discussed on the OFAC enforcement and investigations page, a cautionary letter usually means that OFAC has concluded that insufficient evidence exists to constitute a violation of sanctions regulations that would merit monetary penalties and criminal prosecution.