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09/20/2018
Understanding OFAC: A Best Practices Compliance Guide for All Businesses
Digital Transactions
Over the last decade, the Office of Foreign Assets Control (OFAC) has imposed $4.3 billion in civil money penalties. But did you know that businesses other than banks received 81% of these fines last year?
Yes, OFAC violations are costing U.S. businesses hard-earned cash. Since the attacks of Sept. 11, 2001, OFAC’s role in national security has increased immensely. The passage of the USA PATRIOT Act brought with it a broader definition of the term “financial institution” in order to highlight industries that, by their very nature, are at a heightened risk for money laundering and OFAC violations. Those industries are defined by OFAC as “All Other Businesses.”
OFAC Fines are Costing “All Other Businesses”
From 2006 to 2017, nearly 30% of all fines levied against OFAC’s “All Other Businesses” category ranged from $100,000 to $499,999. For many companies, a penalty that hefty could be enough to put them out of business. Even if not, an OFAC violation could cause irreparable reputational harm that affects profitability for years to come. Here are just a few of the maximum penalties OFAC can levy against businesses:
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