The US Treasury Department’s Office of Foreign Assets Control (OFAC) published its most comprehensive articulation of OFAC compliance expectations to date with A Framework for OFAC Compliance Commitments (“OFAC Compliance Guidance”) on May 2, 2019. To help companies comply with sanctions, the guidance describes common compliance pitfalls seen in its enforcement actions, including:
- Similar to expectations identified by anti-money laundering (AML) and other federal regulators, OFAC calls for a risk-based approach to sanctions compliance with consideration of a company’s size, products and services, and geographic locations informing risk.
- OFAC will exercise broad jurisdiction over organizations and individuals directly subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States, with US persons, or using US-origin goods or services, encouraging them to adopt a risk-based approach to sanctions compliance.
- While a formal sanctions compliance program is not required, OFAC makes clear that the lack of an effective compliance program is a primary factor in sanctions violations and enforcement actions.