Legally Armed: V23N2

By Johanna Reeves, Esq.

A Word to the Wise— Don’t Forget About OFAC!

Oh, who? OFAC. It is the Office of Foreign Assets Control, a small but extremely powerful agency in the U.S. Department of the Treasury charged with administering and enforcing the economic and trade sanctions of the United States. OFAC’s mission is based on U.S. foreign policy and national security goals against certain foreign countries and regimes, terrorists, international narcotics traffickers, weapons proliferators and other threats to the national security, foreign policy or economy of the United States. Its primary statutory authorities are the International Emergency Economic Powers Act (IEEPA), Trading with the Enemy Act (TWEA) and the United Nations Participation Act (UNPA). These laws are implemented principally through presidential executive orders and OFAC regulations, codified at 31 C.F.R. Ch. V. In certain instances, Congress may legislate certain sanctions. This is true for the sanctions against Cuba, Iran, Venezuela and Russia. Most recently, Congress passed the Countering America’s Adversaries Through Sanctions Act (CAATSA), which imposes new sanctions on Iran, Russia and North Korea.

All too often, U.S. companies engaged in international trade focus on the export license requirements and restrictions of the U.S. Departments of State and Commerce, but fail to appreciate the swift and harsh repercussions that can come about, usually first in the form of blocked or frozen funds or enforcement penalties, when U.S. sanctions are violated. It is important to remember that OFAC sanctions apply regardless of whether an export license has been obtained from either the U.S. Department of Commerce or the U.S. Department of State.

A. U.S. Sanctions—What Are They and Who Is Subject?

OFAC implements approximately 30 sanctions programs, which range from comprehensive to limited, through blocking (freezing) assets and implementing trade restrictions. Because the sanctions are imposed, modified or lifted depending upon the foreign policy and national security objectives of the U.S. Government, each program has different levels of restrictions and can vary significantly depending on the target.

1. Comprehensive Sanctions

The comprehensive sanctions, so termed because of their broad scope of coverage and geographic orientation, generally prohibit the following activities: direct and indirect...

This article first appeared in Small Arms Review V23N2 (February 2019)
and was posted online on December 14, 2018


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