OFAC has brought 913 cases since 2003 against widely diverse businesses for total penalties of $4.2B

Date: May 9, 2016

If any business thinks getting caught evading a sanctions program of the US Office of Foreign Assets Control (OFAC) is inconsequential in money and reputation, they should look closely at the settlement agreements OFAC signs with each penalized business.

Like clockwork, at a rate of 5.9 cases per month from April 4, 2003 to February 8, 2016, the US Office of Foreign Assets Control took “enforcement action” against 913 businesses in oil and gas, pharma, pension funds, finance, insurance and diverse other business activities, penalizing them a combined $4.2 billion for violation of its economic sanctions orders. Banking was the industry most penalized and most frequently by OFAC during this time.

OFAC, an agency within the US Treasury Department, receives little public notice for its enforcement activities, compared to other government agencies, such as its Treasury Department counterpart, the Financial Crimes Enforcement Network (FinCEN), which also impose penalties on businesses for regulatory infractions under the Bank Secrecy Act, which focuses on regulatory controls of potential money laundering activities.

OFAC penalty activity believed to be most active in US government

The OFAC penalties are believed to be the largest in number, most frequent and largest in amount of civil penalties imposed by any agency of the United States federal government.

In the 154 months ending in February 2016, the average money penalty in the OFAC “enforcement actions” was $4.6 million. Of the 913 enforcement actions that OFAC initiated, only six were not accompanied by a money penalty.

The penalty amounts, names, sanctions program violated and other data in the OFAC settlement agreements provide valuable information that businesses can use to construct and improve their sanctions and OFAC compliance programs. Few things teach as much as the mistakes of others and in the case of OFAC penalties, that is very true.

OFAC appears to publish all its enforcement actions on its website. Although comments are heard that some OFAC penalties are not made public, no confirmation of that suspicion is available. (SanctionsAlert.com has filed a request for information to OFAC requesting information on any unpublished penalties and also full data about OFAC penalties covering the period January 1, 1990, to December 31, 2002. This data is not presently provided by OFAC on its website.) The penalties that OFAC publishes are posted without comment.

Three businesses and one nonprofit organization were subjects of OFAC enforcement action but paid no money penalty:

Year Organization
2010 Christ for all Nations
2013 VISA International Services Association
2015 Schlumberger Oilfield Holding, Ltd*
2015 BMO Harris Bank NA

(*Note: Schlumberger Oilfield Holdings Ltd. agreed to plead guilty and paid over $232.7 million for violating US sanctions by facilitating trade with Iran and Sudan to US Department of Justice.)

Five businesses, all financial institutions, suffered the highest OFAC monetary penalties:

Year Organization Penalty Amount*
2014 BNP Paribas SA $963,619,900
2012 ING Bank N.V $619,000,000
2009 Credit Suisse AG $536,000,000
2012 HSBC Holdings plc $375,000,000

(**Note: These amounts are merely the OFAC portion of the penalties, and do not include US Department of Justice, or other agencies’ fines or penalties, unless the OFAC documents only mentioned one total amount.)

National security links give OFAC penalties great US government priority

OFAC penalties carries special significance for the United States government because of their intimate ties to national security considerations that form part of the economic sanctions imposed by the President of the United States and executed and enforced by the US Treasury Department through OFAC.

It is for these reasons that SanctionsAlert.com will continue to provide special coverage to the OFAC enforcement actions and the resulting penalties.

Readers are invited to submit comments, ideas and suggestions to SanctionsAlert.com (helpdesk@sanctionsalert.com, or call +1-305-433-7187). All information received will be treated confidentially.

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