An offshore drilling company already under heavy scrutiny for its role in the BP oil spill has now been served with an administrative subpoena by the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”). The company, Transocean Ltd. is being requested by OFAC to turn over information about its operations in Myanmar.

TransOcean has publicly stated that they are cooperating with OFAC and that they have been in full compliance with OFAC administered sanctions regulations. The company went on to say that they did not expect any adverse effect to result from the OFAC investigation.

The United States has maintained sanctions against Myanmar since 1997. These sanctions prohibit U.S. persons from investing in the country either directly or indirectly. According to a November 2009 regulatory filing, TransOcean showed a contract to China’s CNOOC Ltd. for use of a rig in Myanmar at a rate of $206,000 per day through May 2010.

In addition, to this latest issue with Myanmar, TransOcean has also self-reported to OFAC a potential violation of the Iranian Transaction Regulations for shipping goods bound for Turkmenistan through Iran by a freight forwarder.

In receiving a response for an administrative subpoena, OFAC is generally looking for general information about what has occurred around a specific incident. However, there is other important information OFAC looks for including:

1. The extent of the transactions;
2. Over what time period the transactions occurred;
3. The role you played in the transaction.

Typically you have 30 days to respond to the Administrative Subpoena. If you are close to the due date of the response and you are still unsure what to do, then you should hire an attorney and have them request an extension for you. OFAC has in the past allowed for extensions when good cause can be shown.

It is important that you keep in mind that your response to an OFAC Administrative Subpoena is given pursuant to 18 U.S.C. 1001, which is criminal statute covering the falsification or concealment of material facts in statements made in a matter under the jurisdiction of the U.S. federal government. Punishment for violating 18 U.S.C. 1001 includes fines, and/or imprisonment for up to five years, or both. Therefore, you have to take your response to an OFAC Administrative Subpoena very seriously.

The most important thing to do with OFAC is also the most simple: answer them. While it can be a very intimidating process, it is just best to give OFAC what they want so they can continue their investigation. Just make sure you go about it the right way and retain an attorney to help you.

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.