OFAC Penalties – where to find them and X5 examples

For almost 75 years, OFAC has been enforcing sanctions laws to support US foreign policy and national security objectives.

The Office of Foreign Assets Control (OFAC) was created in 1950. The reason? During the Korean War, President Truman sanctioned Chinese and North Korean assets subject to US jurisdiction.

OFAC is part of the US Treasury, and on its website, it has published an easy-to-use database of enforcement actions since 2003, with links to PDF reports published when enforcement actions were publicly released.

• https://ofac.treasury.gov/civil-penalties-and-enforcement-information

X5 UNUSUAL OFAC PENALTIES SINCE 2003 FOLLOW

1. CSE Global (2017)

CSE Global is a Singapore-based technology company mainly operating in the industrial and manufacturing sectors. In 2017, OFAC slapped a whopping $12 million penalty for Iranian sanctions violations.

• https://ofac.treasury.gov/recent-actions/20170727  

At the time, this was the first time OFAC penalised a non-financial institution outside the US that settled a transaction with a sanctioned country in US dollars.

OFAC asserted broader jurisdictional reach over non-US entities engaging in transactions without direct contact with the US (other than making payments in US dollars).

2. 'An Individual' (2020)

In 2020, OFAC revealed it had penalised an individual (a US citizen) for engaging in at least 24 transactions for the benefit of a foreign individual, who at the time, was a specially designated narcotics trafficker.

• https://ofac.treasury.gov/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists

The individual who is not named - perhaps because they were a civilian direct hire of the US Army stationed at the US embassy in Bogota - received a $5000 fine (and one can assume damages to their reputation and career).

• https://ofac.treasury.gov/media/46731/download?inline

The most striking aspect is the penalty's monetary value - one of the smallest in OFAC's history. Also, it's rare for OFAC not to name the defendants in its cases.

3. Richland Trace Homeowners Association (2012)

In 2012, OFAC penalized a Dallas-based homeowners association $9,000 for violating the Former Liberian Regime of Charles Taylor Sanctions Regulations.

A Liberian national appearing on OFAC's Specially Designated Nationals and Blocked Persons List (SDN) list owned a condo that was part of the homeowners association.

You'll be able to learn more about this peculiar case here. https://www.exportlawblog.com/archives/3851 

4. Bittrex (2022)

On October 11, 2022, OFAC announced an enforcement action and $29 million settlement with Bittrex, a Washington-based cryptocurrency trading platform, for apparent violations of multiple sanctions programs, including those prohibiting US companies from doing business with:

• Iran
• Sudan
• Syria
• Cuba
• The Crimea region of Ukraine

https://home.treasury.gov/news/press-releases/jy1006

5. Binance

At the end of 2023, OFAC distributed an enforcement release stating that it had settled with Binance for almost $1 billion for apparent violations of multiple sanctions programs (the specific amount is $968,618,825).

• https://ofac.treasury.gov/system/files/2023-11/20231121_binance.pdf

Source

https://www.sanctions.io/blog/4-unusual-ofac-penalties-learning-points