Guidance on Sanctions from OFAC

The climate around compliance with Office of Foreign Assets Control (OFAC) sanctions has dramatically shifted. OFAC sanctions compliance has become an imperative for organizations across every industry following the 2019 release of OFAC guidelines outlining the main tenets of an effective sanctions compliance program. The need for an encompassing and effective OFAC sanctions compliance program in your financial crime compliance and watch list screening strategy is further underscored by the recent pattern of enforcements against companies that are non-financial institutions.

Where does OFAC sanctions compliance fall on your risk radar? 




Our infographic details the new expectations for OFAC sanctions compliance and outlines important considerations to undertake as you plan and prioritize your OFAC sanctions compliance strategy. It illustrates how the environment around OFAC sanctions compliance has become more volatile for non-financial institutions and why the time to put a robust OFAC sanctions compliance program into place is now. We also explore why a strong OFAC compliance program does not have to compromise your budget or operations timelines and details how to create a strategy tailored to your business requirements and risk appetite.

The infographic breaks down recent enforcement numbers that demand attention: 

• OFAC enforcement actions for 2019 equal 26 and total over $1.2 billion. 15 of those enforcements involve organizations that are not financial institutions¹
• In recent years, 81% of fines levied by OFAC were aimed at non-bank organizations²
• A recent OFAC penalty against a non-bank firm in February 2020 totaled over $7.8 million³

It also illustrates the damaging business impacts of an OFAC sanctions enforcement:

• Exorbitant fines
• Extensive reputational damage
• Damaging remediation costs 
• Expensive business disruptions
• Damaged shareholder value 

Additionally, we outline the key takeaways from the OFAC guidelines for an effective sanctions compliance program that apply to businesses across every industry. These new guidelines formalize OFAC’s regulatory expectations for the core sanctions program elements all businesses need to have in place, including:    

• Top level commitment to sanctions compliance across the enterprise
• The establishment of a risk assessment strategy that supports a risk-based approach on conducting due diligence of customers, client relationships and transactions
• Robust internal controls that include well-defined policies and procedures to identify, interdict, escalate, report and keep records related to OFAC sanctions
• Effective levels of independent auditing and testing
• Annual sanctions-specific training

The guidelines also establish a measurement tool by which OFAC can calculate the extent of penalties assessed for violations.

Identifying the OFAC sanctions risks your customers, vendors and third-party suppliers could represent can enable your business to avoid the damaging impacts of an OFAC enforcement. By exploring this infographic, you can build a deeper understanding around why a strong OFAC sanctions compliance program is an imperative for sustainable business success. Take a closer look for tips and insights on how your business can achieve an effective, cost-efficient OFAC sanctions compliance strategy that supports your core business. Find complete details in our infographic.   

1, 3. https://www.treasury.gov/resource-center/sanctions/CivPen/Pages/civpen-index2.aspx
2. Compliance Week, “Understanding OFAC: A Best Practices Compliance Guide for All Businesses,” 2018
https://www.complianceweek.com/thought-leadership/understanding-ofac-a-best-practices-compliance-guide-for-all-businesses/23765.article