Yesterday the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) released information about new penalties and violation settlements. Oddly, there were no penalties or violations settlements relating to Iran. The reason I find this odd is that it is apparent that the Iran sanctions program, formally referred to as the Iranian Transactions Regulations (“ITR”), is the most heavily enforced sanctions program that OFAC administers.

Most of the new penalties deal with violations of the Sudanese Sanctions Regulations. These violations amounted to $230,000 and dealt with the exportation of goods and services to Sudan. The other violations fell under the Burmese and Belarus sanctions respectively, and totaled nearly $235,000. These transactions both dealt with the transfer of funds to designated parties. In total the announcement of penalties and violation settlements totaled five and resulted in payment of $465,000 to OFAC.

Although any payment for an OFAC violation is unfortunate, the penalties announced by OFAC were very mild compared to some of the penalties that have been imposed by OFAC over the past couple of years. The penalties imposed in this new announcement are more reminiscent of the OFAC penalties handed down during the Bush years. Whether this is a trend that will resume or whether the penalties were lower as a result of the specific transactions or the programs they fell under is fairly easy to determine; the answer is the latter. While it is true that OFAC does not as aggressively enforce those sanctions programs implicated in yesterday’s announcement, penalties are determined on a case by case basis taking into consideration the transaction value, the nature of the violations (willful or not), and the factors set out in the OFAC enforcement guidelines. As such, these penalties do not signal a new trend but reflect the nature and circumstances surrounding the transactions.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.