Office of Foreign Assets Control Issues $985 Million In Sanctions

The Squire Patton Boggs firm’s Global Investigations and Compliance Review reports that the Department of the Treasury’s Office of Foreign Assets Control imposed a total of $984,851,289.90 (the smallest penalty was calculated to the penny) in penalties during the second half of 2023.  

The total represents eight large enforcement actions collected from a range of industries. New York-based Emigrant Bank paid $31,867.90. Cayman Islands-based Binance Holdings, a virtual currency exchange with global affiliates paid $968,618,825.

By OFAC standards, three of the eight cases involved egregious conduct. Five disclosed their conduct voluntarily. All took mitigating factors into account.

In the $1,207,830 settlement with CoinList Markets LLC, a California-based virtual currency exchange, $300,000 of the settlement amount was suspended considering “the individual facts of this case, including CLM’s financial circumstances.”

That amount is suspended pending completion of CLM’s compliance commitments, one of which is that the $300,000 be invested in additional sanctions compliance controls.

Six actions involved the financial industry. The violations included: Maintaining a CD account for individuals resident in Iran; Failing to identify users who said they resided in non-embargoed countries but an address within Crimea; and Encouraging the use of virtual private networks (“VPNs”) to circumvent geofencing controls.

Two enforcement actions involved a global manufacturing company and a specialized building materials company. The manufacturer sold materials through a German reseller to an entity controlled by Iran’s Law Enforcement Forces.

Parent companies should regularly audit their overseas subsidiaries, particularly if they pose sanctions risks or are located in high-risk jurisdictions.

All entities should consider having confidential reporting mechanisms. OFAC notes that “whistleblowers play a vital role in identifying prohibited conduct and promoting compliance, and responsible companies should have channels in place for employees to raise concerns without fear of retaliation.”