On May 2, 2019, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) released guidance on effective sanctions compliance programs. This guidance is useful for any company with an international supply chain, as both U.S. and foreign companies may be subject to, and at risk for violating, U.S. sanctions law. As a recent example, e.l.f. Cosmetics settled with OFAC in January of 2019 for $996,080 resulting from apparent violations of the North Korea Sanctions Regulations by two of e.l.f.’s Chinese suppliers. One of the aggravating factors that OFAC considered in that case was that e.l.f.’s OFAC compliance program was “either non-existent or inadequate.” The new OFAC guidance now provides a roadmap for companies to follow in building a compliance program, and the guidance specifies that OFAC “will consider favorably [companies] that had effective [compliance programs] at the time of an apparent violation.”
Our colleague, Kristina Arianina, recently posted a comprehensive summary of the new OFAC guidance, as well as an analysis of the significance of the guidance and how it relates to similar guidance documents released by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). That post may be read here.