OFAC, prominently known as the Office of Foreign Assets Control, is a federal agency of the U.S. government which monitors, administers, and issues imperative guidelines on sanction programs. OFAC operates with a primary aim to protect and strengthen U.S. national security.
When a foreign country has been designated or sanctioned by the OFAC, it means that any trade or engagement with the sanctioned party is seen as a threat to compromise national security.
When you engage with individuals or entities that have been sanctioned by the OFAC, you are termed a “sanction violator”. This means you could be prosecuted for compromising national security.
Most of the time, civil liabilities for violating the OFAC sanctions include financial penalties, imprisonment, operational prohibitions, and off-limit designations.
If you or your associates manage to get one of these badges, you are simply out of business, and possibly from the limelight for decades together.
In the past, many businesses and individuals have violated the OFAC sanctions, which led to the OFAC penalizing them and imprisoning them for their engagement in restricted activities, such as money laundering, terrorism financing, terrorism conspiracies, restricted arms export activity, and so on.
The following will discuss in detail the consequences of violating OFAC sanctions.
Let’s get started.
There is no specific threshold for the penalty liability when someone violates the OFAC sanctions. The monetary penalty could range from anything between $90,000 to the higher end of the reported penalty of $12 Million, and historic scenarios where financial institutions were hit with a whopping $1 Billion penalty assessment from the OFAC.
On average, OFAC could penalize an individual or group or an entity with $300,000 or more + interest for every violation.
But there’s more to OFAC violations than monetary consequences.
Violating OFAC sanctions could also let loose all hell at once.
Your business and those who engage with parties listed in the federal watch lists published by the OFAC could be assessed for civil, criminal, and federal offence violations in addition to the sanction violation liabilities.
This means entities could lose operational rights, can be imposed with restricted trade activities, and even be banned permanently from operating within the geographies of the U.S. and its territories.
Individuals and groups could be assessed for term imprisonment of a minimum of 10 years to a life sentence. Further, criminal liabilities could impose hard time punishment during the period of imprisonment with monitored activity and severe investigations.
It is essential for businesses to note that not only violating the federal security norms will be deemed a threat to the national security but engaging with others who are compromising the national security could also bring civil and monetary consequences your way.
This means vetting your recruits, business associates, partners, intermediaries, and entities against the OFAC watch list is not just a regulatory practice but a necessity in these trying times.
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