You are sitting at your desk when you are handed an envelope that just arrived in the mail. It bears the return address of the Department of Treasury’s Office of Foreign Assets Control (OFAC) and it contains an administrative subpoena seeking information and documents relating to a particular transaction in which your company participated. It asks you to make this discovery production to OFAC’s Office of Enforcement within 30 days.
You may have seen news stories about financial institutions and manufacturing companies facing extremely large civil penalties for violations of OFAC’s sanctions programs, but if you have not dealt with OFAC before, there are several important questions that you are probably asking yourself:
What types of transactions can give rise to a violation of an OFAC sanctions program?
OFAC sanctions programs have a broad reach. Most obviously (and with certain exceptions), a U.S. company cannot engage in financial transactions with, sell goods to, or provide services to anyone on the SDN List or to nationals of the countries that are the subjects of the comprehensive sanctions programs. But not all violations of the OFAC programs are quite so obvious.