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OFAC Revamps Guidance on Sanctions Violations Penalties
By Matt Squire
printThe U.S. Treasury Department outlined Monday how it intends to enforce new penalty powers against U.S. financial institutions and other companies that violate economic sanctions. The clarification, issued by the department's Office of Foreign Assets Control (OFAC), follows the October passage of the International Emergency Economic Powers Enhancement Act, a law that increased by fivefold the civil penalties that can be levied against those who deal with blacklisted companies and individuals. Under the new penalty scheme, OFAC can penalize violators the greater of $250,000 or twice the amount of the prohibited transaction. Penalties had been previously capped at $50,000 in...
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When Congress enacted a law last year that increased the potential penalties for violating economic sanctions by five-fold, financial institutions had one question: how would the new penalty powers be used? Sparingly, says OFAC Director Adam Szubin, in the second part of a two-part interview.
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Betsy Sue Scott, former head of the civil penalties division, says a recent increase of the maximum fines for OFAC violations will better fit the punishment to the crime. Violators previously were only receiving a "slap on the wrist" for serious offenses, she says.
The law, enacted last week, increases civil penalty amounts fivefold but will be used chiefly in the enforcement of "major cases," an OFAC official said Monday.