Enforcement Actions & Reporting Obligations Flashcards

Under OFAC regulations, what is the maximum civil penalty per violation for a willful sanctions violation as of recent enforcement guidance?

Answer: $1,000,000 or twice the transaction value

OFAC can impose civil penalties up to $1,000,000 or twice the value of the underlying transaction for willful violations, whichever is greater.

A U.S. bank discovers it processed a wire transfer to a blocked entity three years ago. What is the standard OFAC reporting deadline once the violation is identified?

Answer: 30 calendar days

OFAC requires that blocked or rejected transactions be reported within 10 business days of the blocking or rejection, but initial discovery reports for past violations are typically due within 10 business days as well — however, blocking reports have a 10-business-day rule while annual reports follow a separate schedule.

Which OFAC enforcement factor results in the greatest reduction of a base penalty amount in a settlement negotiation?

Answer: Voluntary self-disclosure of the violation

Voluntary self-disclosure is the single most significant mitigating factor under OFAC's Economic Sanctions Enforcement Guidelines, typically reducing the base penalty by 50%.

What does OFAC's 'egregious case' designation mean for civil penalty calculations?

Answer: The base penalty is calculated at the top of the applicable penalty schedule

For egregious cases, OFAC uses the top of the applicable base penalty schedule as the starting point for calculation, rather than the midpoint used in non-egregious cases.

Under FinCEN's SAR regulations, what is the filing deadline for a suspicious activity report involving a known or suspected sanctions violation?

Answer: 30 calendar days from detection

Financial institutions must file a SAR within 30 calendar days of initially detecting a suspicious activity, or 60 days if no suspect is identified at the time of detection.

Which entity has primary enforcement authority over non-bank financial institutions for OFAC compliance in the United States?

Answer: OFAC itself, with no separate examiner

OFAC itself has direct enforcement authority over all U.S. persons and entities; non-bank financial institutions do not have a separate prudential regulator for OFAC purposes.

A financial institution receives a subpoena from OFAC for records related to a potential sanctions violation. Which action should be taken first?

Answer: Consult legal counsel before producing any documents

Legal counsel should be engaged immediately upon receipt of an OFAC subpoena to assess scope, privilege, and the institution's legal obligations before producing records.