Financial Operations Network | OFAC Compliance: 2018 Civil Monetary Fines Increase and Recent Actions
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has increased the maximum fines for civil violations. How much and why should you care?
Compliance, Vendor Validation, OFAC
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OFAC Updates: 2018 Civil Monetary Fines Increase, and Recent Actions

OFAC Updates: 2018 Civil Monetary Fines Increase, and Recent Actions

Should You Care?

In keeping with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (sic), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has increased the maximum fines for civil violations. The 2015 Act’s intent was “to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.” Translation: Penalties are increased to keep pace with inflation. The latest increases amounted to approximately two percent for each of the types of fines, and became effective March 19, 2018.

Meanwhile, OFAC activity in August so far has related to Iran, North Korea and Magnitsky Act designations against two Turks. For a complete list of 2018 OFAC Actions to date, see this resource page on the U.S. Dept. of Treasury website.

Why should you keep up with OFAC? Aren’t sanctions something that only banks and insurers have to worry about? No. In fact according to SanctionsAlert.com, financial institutions average just 39. 8 percent of total OFAC enforcement actions — sizable, but by no means all.

Yes, the annual number of enforcement actions is down considerably from the anomalous early years after 9/11. Nevertheless, enforcement actions go on all the time. In assessing risk, it’s instructive to know who has gotten into trouble.

Besides financial services, the top industries running afoul of U.S. sanctions in the last few years include IT/Telecom, Medical/Pharmaceutical, Non-Profit Institutions, Offshore Services, Oil & Gas and the Professional Services sector. Others include the Airlines Industry, Electronics, Logistics & Shipping and Tourism.

Compliance, Vendor Validation, OFACIt’s important for your vendor verification and validation process to include checking vendors against government sanction lists. You can do it yourself or hire it out. It is much easier to use a service that will run the checks for you — one that has identified all the lists and has an automated process in place to quickly return results. Either way, you don’t want to err and face fines and a public relations calamity.

To learn more about vendor verification and compliance click here to request more information or call us at (678) 335-5735.



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Verify the Accuracy of Vendor Information and Stay in Compliance with IRS and Treasury Department Regulations

Government regulators are increasing the complexity of regulations and penalties associated with vendor-related non-compliance.

Penalties for incorrect 1099’s have more than doubled in recent years. Over the last several years, OFAC has levied more than $1 billion in fines against American companies or subsidiaries that did business with restricted businesses, organizations and individuals on its SDN list. In addition to fining these companies, the Treasury Department posts the names of infringing organizations along with fines paid.

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