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OFAC Compliance, Sanctions, Subpoenas, Penalties and Powers

Foreign Assets Control (OFAC) one of the offices under the U.S. Department of the Treasury both administers and also enforces U.S. economic, as well as trade sanctions against targeted foreign governments, groups, organizations or individuals in accordance and furtherance with the United States foreign policy benefits, national security goals and economic objectives such as policies against some regimes, counter-terrorism policies , policies against anti-terrorist organizations, weapons of mass destruction proliferators and narcotic traffickers.

OFAC administers and enforces economic sanctions programs pursuant to Presidential and statutory authorities. These powers maybe driven from the authority of Presidential national emergency powers, as well as specific legislation, in order to prohibit transactions and/or block (or ‘‘freeze'') assets –all subject to U.S. jurisdiction.

These economic sanctions are programmed so that it deprives the “targeted regime or organization” of the use of its assets and to deny it access to the U.S. financial system so the it would eliminate “the benefits of trade, transactions, and services involving U.S. markets, businesses, and individuals”. And to further protect certain important U.S. nonproliferation goals.

The organizations subject to US jurisdictions are any US person or entity and any foreign entities that conduct business in or with the US persons or US or uses US-origin goods or services. OFAC recommends a risk-based approach to Sanction Compliance Program (SCP) to avoid CMP (Civil Monetary Penalty).

On September 2nd of 2020 (09-02-2020) OFAC formed a new nonofficial working alliance with “Department of Justice, State of Delaware” , where Delaware DOJ is responsible for providing legal counsel and advise and services to government organizations in Delaware in clarification of OFAC sanctions and investigation as a function of the State of Delaware Constitution and its organic statutes.

The memorandum of understanding between OFAC and state of Delaware emphasizes that Delaware DOJ also has the ability to exercise certain independent law enforcement functions.

On October 5th,2020 the Department of the Treasury's Office of Foreign Assets Control (OFAC) will begin to enforce rules to “further implement the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, by adjusting for inflation its civil monetary penalties for failure to comply with certain recordkeeping and reporting requirements, which are contained in OFAC's Economic Sanctions Enforcement Guidelines in OFAC's Reporting, Procedures and Penalties Regulations. (Inflation Adjustment of Civil Monetary Penalties Related to Reporting and Recordkeeping, 31 CFR Part 501, Docket Number OFAC–2020–0001).

The office of foreign asset control uses the following authorities to enforce and collect civil penalties for an Iran related sanction violation —”IRANIAN ASSETS CONTROL REGULATIONS ■ 1. The authority citation for part 535 continues to read as follows: Authority: 18 U.S.C. 2332d; 31 U.S.C. 321(b); 50 U.S.C. 1701–1706; Pub. L. 101– 410, 104 Stat. 890 (28 U.S.C. 2461 note); E.O. 12170, 44 FR 65729, 3 CFR, 1979 Comp., p. 457; E.O. 12205, 45 FR 24099, 3 CFR, 1980 Comp., p. 248; E.O. 12211, 45 FR 26685, 3 CFR, 1980 Comp., p. 253; E.O. 12276, 46 FR 7913, 3 CFR, 1981 Comp., p. 104; E.O. 12279, 46 FR 7919, 3 CFR, 1981 Comp., p. 109; E.O. 12280, 46 FR 7921, 3 CFR, 1981 Comp., p. 110; E.O. 12281, 46 FR 7923, 3 CFR, 1981 Comp., p. 110; E.O. 12282, 46 FR 7925, 3 CFR, 1981 Comp., p. 113; E.O. 12283, 46 FR 7927, 3 CFR, 1981 Comp., p. 114; and E.O. 12294, 46 FR 14111, 3 CFR, 1981 Comp., p. 139. Subpart G—Penalties 2. Section 535.705 is revised to read as follows: § 535.705 Administrative collection; referral to United States Department of Justice.( Cited from OFAC official website)

“In the event that the person named does not pay the penalty imposed pursuant to this part or make payment arrangements acceptable to the Director of the Office of Foreign Assets Control within 30 days of the date of mailing of the penalty notice, the matter may be referred for administrative collection measures by the Department of the Treasury or to the United States Department of Justice for appropriate action to recover the penalty”. “Cited from OFAC official website”

The OFAC rules are complex and detailed. There are many steps that need to be taken to ensure compliance, transparency and record keeping of the individuals working in the fields that may involve these sanctions.

To ensure compliance and to avoid freeze of your assets and notice of penalties, also to avoid criminal investigations and charges relevant to OFAC violations, contact an experienced lawyer to ensure compliance and conformance and to avoid civil and criminal penalties.

This is a legal blog. It is not intended to be used as legal advice.
This blog does not create Attorney-Client Relationship. For further information please contact the law offices of attorney Ramona Kennedy.

Ramona Kennedy (Attorney) received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of American Immigration Lawyers Association (AILA) and Orange County Trial Lawyers Association (OCTLA). Ramona Kennedy is fluent in English and Farsi (Persian).
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