OFAC’s Enforcement Focus on Small to Medium Size Companies Continues

OFAC’s recent enforcement actions against DNI Express Shipping Company and Southern Cross Aviation LLC should put owners and management of small to medium size companies on notice that failure to provide accurate, complete, and timely responses to administrative subpoenas can carry potentially serious consequences. OFAC only issued a Finding of Violation for each company and imposed no civil penalties. However, similar conduct in the future may not receive such favorable treatment.

Notably, these investigations occurred prior to the June 2019 amendments to the Reporting, Procedures and Penalties Regulations (RPPR). These changes increased criminal penalties for willful violations of the Trading with the Enemy Act (TWEA), which covers administrative subpoena responses. Before, individuals who committed willful violations, or officers, directors, and agents of a corporation who knowingly participated in such violations, could only be fined up to $100,000 and face 10 years in jail. Now, all willful violations are subject to a $1,000,000 fine and any individual may be subject to up to 20 years in jail.

These enforcement actions, and other recent ones like them, underscore that OFAC will continue to investigate individuals and entities (no matter their size) to ensure compliance with its sanctions programs. OFAC administrative subpoenas must be taken seriously and anyone who finds themselves subject to an OFAC investigation or who needs guidance on their compliance obligations should seek experienced compliance counsel. 

Posted on: August 15, 2019, by :

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