Recent settlements in civil enforcement proceedings brought by the Office of Foreign Assets Control (OFAC) suggest that cover-ups, not crimes, may invite the stiffest penalties. Frequently, companies that cooperate with OFAC investigations, admit wrongdoing and take remedial actions to prevent future violations escape the enforcement process with mild punishments. Indeed, even companies that eventually cooperate after some initial resistance fare well in OFAC’s administrative enforcement process and often avoid criminal penalties altogether — penalties that, aside from the reputational damage, carry much more severe consequences, including prison time for individuals and massive financial impact.
Thus, it is useful for practitioners to understand the OFAC cooperation process. Stated simply, cooperation often yields leniency, and practitioners need to understand how to navigate the process in order to provide their clients with a comprehensive set of options for dealing with a potential sanctions violation. And even for violators who — whether or not they choose to cooperate with OFAC — become the targets of criminal investigations, the administrative penalties dispensed by OFAC provide an important comparison that defense attorneys should use while trying obtain the lowest possible sentence for their clients.