Sanctions, OFAC Licenses, and Regulatory Compliance
Navigating U.S. sanctions regimes requires careful legal analysis and strategic risk management. Our firm advises businesses, financial institutions, and individuals by evaluating previous or contemplated transactions to identify U.S. sanctions compliance risk and key considerations.
Key Concepts
Sanctions: A foreign policy tool used to restrict and limit a target’s economic activity with any U.S. nexus.
Trade Restrictions: Sanctions that include trade embargoes, restrictions on particular exports or imports to/from a certain country.
Financial Sanctions: This type of sanction typically refers to the blocking of foreign assets, freezing of assets in the U.S. of specified targets, and denying a target’s access to U.S. markets, foreign assistance or loans and investments.
Secondary Sanctions: Sanctions placed on third parties who engage in dealings with primary sanction targets, especially when activities can undermine or evade the purpose of primary sanctions.
U.S. Department of Foreign Assets Control (OFAC): The U.S. Treasury Department’s agency that administers and enforces compliance with U.S. economic sanctions.
Licenses: Specific authorization from OFAC to partake in a specified activity with a party or asset that may be otherwise blocked or prohibited.
Background
A key foreign policy tool at the disposal of the U.S. is the ability to impose sanctions on bad actors deemed harmful to the United States or its interests. The authority for many of these sanctions derives from the International Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), and the Foreign Narcotics Kingpin Designation Act (Kingpin Act). These measures can include restricting or prohibiting U.S. trade or services, blocking property belonging to targets, imposing penalties for violations, compelling records of historical transactions, and imposing reporting obligations.
The U.S. currently maintains over 30 different sanctions programs related to different countries and industries around the world, with designations updating every day. The type of sanctions can vary from limited to a specific industry sector or person to full embargoes, depending on the regime. Separately, there are also several different lists of prohibited parties administered by OFAC, including the Specially Designated Nationals and Blocked Persons List (SDN).
Due to the serious nature of potential violations of U.S. sanctions, OFAC has the authority to investigate, charge penalties, or even bring criminal charges for flagrant violations. It is important that if a company believes they have committed a historical or present violation, that they consider hiring legal assistance with filing a Voluntary Self-Disclosure of the potential violation to OFAC and cooperate with the agency to investigate the matter.
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What we Do
We assist clients in assessing specific transactions for sanctions risk, conducting due diligence on all parties involved in the transaction, managing regulatory exposure, and responding to enforcement actions. If needed, we also assist with applying for OFAC licenses of varying degrees. With a practical understanding of sanctions regimes and evolving regulatory frameworks, we help clients operate confidently in an increasingly complex global environment.
Our sanctions and compliance practice focuses on key U.S. sanctions programs, including:
- Russia and Belarus Sanctions
- Iran Sanctions
- Cuba Sanctions
- Venezuela Sanctions
- China-Related Trade Restrictions
- Syria Sanctions
- North Korea Sanctions
- Specially Designated Nationals (“SDN”)
- Sectoral Sanctions Identifications
- Anti-Money Laundering (“AML”) and Financial Compliance
- OFAC Investigations and Enforcement Actions
- Transaction Due Diligence
- Sanctions Compliance Programs and Policy
- Internal Audits
We also advise clients on general license applicability, specific authorizations, and other legal mechanisms that may permit transactions otherwise restricted under U.S. sanctions laws. Our firm assists clients in identifying compliant pathways for international operations while minimizing regulatory and enforcement risks.
Our services include:
- Specific License Applications
- General License Analysis and Compliance
- Humanitarian and Medical Trade Authorizations
- Wind-Down and Divestment Authorizations
- Blocked Funds Releases and Asset Unfreezing Requests
- Interpretive Guidance and Advisory Opinions
- Compliance Exceptions and Regulatory Exemptions
- Voluntary Self-Disclosures (“VSDs”)
- Remediation Measures
- Transaction Structuring and Risk Mitigation Strategies