The Office of Foreign Assets Control recently announced its imposition of a $216 million penalty on a U.S. firm for violating OFAC’s Ukraine-/Russia-related sanctions and failing to comply with an OFAC subpoena.
OFAC states that this is the statutory maximum civil monetary penalty. Aggravating factors included the willful nature of the violations and their facilitation of a sanctioned Russian national’s access to, and use of, the U.S. financial system. The firm’s lack of an OFAC penalty in the previous five years was a mitigating factor, but OFAC notes that given the totality of the circumstances no penalty reduction was warranted.
OFAC adds that this enforcement action highlights the risks that arise when gatekeepers—such as investment professionals, accountants, attorneys, and providers of trust and corporate formation services, among others—fail to properly understand the risks associated with the provision of their services. OFAC therefore urges gatekeepers to remain vigilant of the risk that unscrupulous actors, including sanctioned parties or their proxies, may seek to use professional services to conceal a property interest or otherwise evade OFAC sanctions.
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