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OFAC Increases Civil Monetary Penalties

posted by Jennifer Diaz April 4, 2018 0 comments

coinsOn March 19, 2018, the Office of Foreign Assets Control (OFAC) adjusted its maximum civil monetary penalties for inflation (per the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). The rationale for this increase is to maintain and improve the effectiveness and deterrent effect of civil monetary penalties. Any increase applies to penalties assessed after the effective date regardless of whether the violation occurred prior to such date.

How much did civil monetary penalties increase?

Increases to penalties were assessed as follows:

  • Violations of the Terrorism Risk Insurance Program will be assessed a maximum penalty of $1,360,525 up from $1,333,312.
  • As codified at 31 C.F.R. § 598.701, any violation of the Foreign Narcotics Kingpin Designation Act and the Foreign Narcotics Kingpin Sanctions Regulations will be assessed a maximum penalty of $1,466,485 – increasing from its previous maximum penalty of $1,437,153.
  • A penalty amounting to the greater of $295,141 or twice the amount of the underlying transaction will be assessed for a violation of the International Emergency Economic Powers Act and any of the following:
    • Iranian Assets Control Regulations
    • Narcotics Trafficking Sanctions Regulations
    • Sudanese Sanctions Regulations
    • Weapons of Mass Destruction Trade Control Regulations
    • Zimbabwe Sanctions Regulations
    • Syrian Sanctions Regulations
    • Cote d’Ivoire Sanctions Regulations
    • Weapons of Mass Destruction Proliferators Sanctions Regulations
    • Darfur Sanctions Regulations
    • Democratic Republic of the Congo Sanctions Regulations
    • Belarus Sanctions Regulations
    • Lebanon Sanctions Regulations
    • Hizballah Financial Sanctions Regulations
    • Iraq Stabilization and insurgency Sanctions Regulations
    • Magnitsky Act Sanctions Regulations
    • Western Balkans Stabilization Regulations
    • Global Terrorism Sanctions Regulations
    • Terrorism Sanctions Regulations.
  • Violations of the Foreign Terrorist Organizations Sanctions Regulations will be assessed a penalty amounting to the greater of $77,909 or twice the amount of which a financial institution was required to retain possession or control pursuant to 31 C.F.R. § 597.701(b).
  • A penalty of $86,976 per violation on any person violating any license, order, or regulation issued under the Trading with the Enemy Act (TWEA), as codified at 31 C.F.R. § 501.701.
  • Finally, any violation of the Clean Diamond Trade Act and the Rough Diamonds Control Regulations will be assessed a penalty of $13,333, up from $13,066.

To read the final rule, click here: OFAC Final Rule on Inflation Adjustment of Civil Monetary Penalties.  For more information about this announcement please contact us at 305-456-3830 or via email at info@diaztradelaw.com.

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