Over the past several years, OFAC has had to impose millions of dollars in civil penalties. The majority of the fines resulted from failure to block illicit transactions when there was a reference to a targeted country or SDN. Mitigating factors in Civil Penalty procedures include self-disclosure, the use and sophistication of interdict software, and other compliance initiatives.
OFAC Laws and Criminal Penalties
The following is a summary of the OFAC legal framework, and criminal penalty provisions. Full details of OFAC’s sanctions can be found on the Treasury.gov website.
Trading With the Enemy Act
50 U.S.C. App. §§§ 1-44 (“TWEA”) [North Korea, Cuba, Transaction Control Regulations] provides for ten years imprisonment, a USD1,000,000 fine for corporations, and a $100,000 fine for individuals, as well as forfeiture of funds or other property involved in violations. In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation and that individuals may be fined $250,000 for felonies.
International Emergency Economic Powers Act
50 U.S.C. §§§ 1701- 06 (“IEEPA”) [Diamond Trading, Sudan, Iran, Zimbabwe, the Balkans, Terrorism, Narcotics, Nonproliferation, Syria, and Burma] provides for up to 20 years imprisonment, USD500,000 in fines for corporations and USD250,000 for individuals. Civil penalties of up to USD50,000 may be imposed administratively. In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation, or $500,000 for felonies and that individuals may be fined $250,000 for felonies.
Iraqi Sanctions Act
Pub.L. 101-513, 104 Stat. 2047-55 (“ISA”) [Iraq] provides for twelve years imprisonment and a USD1,000,000 corporate or personal fine [In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation]
United Nations Participation Act
22 U.S.C. §§ 287c (“UNPA”) [Iraq and Diamond Trading] provides for ten years imprisonment, a $10,000 criminal fine for corporations and individuals, and criminal forfeiture of funds or other property involved in violations [In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation, or $500,000 for felonies and that individuals may be fined $250,000 for felonies]
International Security and Development Cooperation Act (ISDCA)
Codified at 22 U.S.C. 2349 aa-9 (Iran) has no criminal penalties, but general Customs and other relevant penalty provisions may apply to particular circumstances
The Cuban Democracy Act (CDA)
- 22 U.S.C. §§ 6001-10 [relating to Cuba] has the same fines as TWEA: ten years imprisonment, a USD1,000,000 fine for corporations, and a $100,000 fine for individuals, as well as forfeiture of funds or other property involved in violations. In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation and that individuals may be fined $250,000 for felonies
The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act
22 U.S.C. 6021-91, [relating to Cuba] has the same fines as TWEA and codifies the Cuban Assets Control Regulations: ten years imprisonment, a USD1,000,000 fine for corporations, and a $100,000 fine for individuals, as well as forfeiture of funds or other property involved in violations. In addition, 18 U.S.C. §§ 3571 provides that organizations or individuals convicted of violating a criminal statute may be fined the greater of the amount specified in the statute, or twice the pecuniary gain or loss from the violation and that individuals may be fined $250,000 for felonies
The Antiterrorism and Effective Death Penalty Act
(Enacting 8 U.S.C. 219, 18 U.S.C. 2332d and 18 U.S.C. 2339b) [Cuba, North Korea, Iran, Iraq, Syria and Sudan] provides for criminal penalties of $500,000 per count against corporations, and ten years imprisonment and/or $250,000 per count for individuals, for willful violations
The Foreign Narcotics Kingpin Designation Act
Pub L. No. 106-120, tit. VIII, 113 Stat 1606, 1626-1636 (1999) (to be codified at 21 U.S.C. §§§§ 1901-1908) provides for criminal penalties of $10,000,000 per count against corporations, and thirty years imprisonment and/or $5,000,000 per count for individuals, for willful violations
The Criminal Code
At 18 U.S.C. §§ 1001 provides for five years imprisonment and a USD10,000 criminal fine for knowingly making false statements or falsifying or concealing material facts when dealing with OFAC in connection with matters under its jurisdiction.
