Kreller Hot Topic Report | OFAC on the Essential Elements of a Compliance Program

by Lauren Caryer, PhD

OFAC on the Rise
On May 2, 2019 the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released “A Framework for OFAC Compliance Commitments,” a set of guidelines aimed to instruct companies in the components of a successful sanctions compliance program (SCP). The compliance framework is being released just as OFAC has been accelerating its enforcement efforts.

Thus far in 2019, the Department of the Treasury’s civil penalties and enforcement database listed fourteen OFAC enforcement actions with total settlements approaching 1.3 billion dollars, a staggering uptick in activity compared with 2018’s seven enforcement actions totaling 71.5 million dollars and 2017’s sixteen enforcement actions totaling 119.5 million. Both the newly released Framework and OFAC’s ramped up application of civil penalties suggest that the Treasury Department expects businesses to seriously engage in the development, promulgation, and application of risk-based due diligence programs.

As The Wall Street Journal noted in a May 2, 2019 article, the OFAC Framework “signals the agency wants companies to have an active sanctions compliance program, rather than a written policy alone, as the U.S. sanctions program becomes more dynamic and complex.”