The number of administrative subpoenas being issued by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) continues to grow every year. Outside of being an indication of you or your company’s subjection to a federal administrative investigation, what do you really need to know about the OFAC subpoena process? Well in the words of Sir Francis Bacon, knowledge is power, and have some background on OFAC subpoenas can be very useful in skillfully responding to one.

To understand the investigation which the OFAC administrative subpoena signifies, one should understand the broad authority which OFAC wields in the process. Essentially, OFAC can, and sometimes does, ask for any information they want from the last five (5) years. Typically, these requests relate to specific transactions, but I have seen OFAC previously request information such as an individual’s personal residences for the previous 20 years, all of a companies transactions with a particular country, etc. Perhaps, an additional point to consider is that OFAC does not view itself as a regulator, but as a law enforcement agency. Thus, OFAC, just like any other law enforcement agency investigates the matters very thoroughly to obtain a complete understanding of the conduct which may have constituted an apparent violation.

Another important point to remember is that you are not alone. OFAC issues over 1,000 administrative subpoenas per year. This is both a good and a bad thing. On one hand, it is good, because it means that OFAC can only pursue the most egregious of cases for imposition of penalty. Also, in the case of an apparent violation, OFAC may not be able to return an enforcement action prior to the lapsing of the statute of limitations for an apparent violation, thereby effectively saving you from any penalty for such violation.

On the other hand, OFAC’s high number of administrative subpoenas is also a bad thing, because information derived from those subpoenas can be used to issue additional subpoenas to other parties which may have also been involved in the apparent violations for which you are being investigated. Of course, nothing sours a business relationship faster than engaging in some type of conduct which leads your business partners to be subjected to a federal investigation.

Finally, OFAC administrative subpoenas come with a thirty (30) day deadline. This is often far too short of a time to properly respond to the subpoena. Not to worry, OFAC enforcement officers generally understand the time constraints and are somewhat sympathetic if the responding party requires an extension. That said, more than a few requests for extensions and they may not be as understanding. Any fears that they may have about dragging out the responses and/or the investigation can be countered with an offer to sign a tolling agreement to extend the state of limitations for enforcement purposes.

Responding to an OFAC administrative subpoena can be a complicated and frustrating process, but with a little bit of background on how OFAC handles these investigations and what you can expect during the process it can become a very manageable undertaking.

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