Once again, the Office of Foreign Assets Control (OFAC) is the top of the news. With the payment by mega-bank, J.P. Morgan Chase, of $88 million to OFAC for violations of the Cuban Assets Control Regulations, OFAC has flexed its enforcement muscle. Besides banks and other financial institutions, companies involved in the business of import, export, logistics, and international trade are targets of OFAC investigations and penalties. There is a common theme to those investigations and penalties – somehow doing business with Iran or Cuba.
The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on the foreign policy and national security goals of the United States against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. So, for example, if there is an embargo of a country, virtually no business transactions may take place with the government, persons, or companies of that country (for example, Cuba or Iran). If a certain government regime is on an OFAC list, the prohibitions of doing business are with persons connected to that regime (for example, Sudan).
The second common trend that I have noticed in my years of representing persons and companies which have received a letter of investigation, administrative subpoena, or proposed penalty from OFAC is that the consequences of violations are much higher.