OFAC Enforcement Trends: Exporters in the Crosshairs

The pace of OFAC enforcement actions has increased slightly in 2017...

While physical exports of U.S.- origin items make up only a portion of those cases, OFAC has continued to advance new theories of liability that threaten to expand the range of violative conduct for exporters and re-exporters in the United States and around the world. Most notably, in March 2017 OFAC reached its largest ever settlement with a non-financial institution ($100,871,266) following an investigation into a Chinese company’s apparent export and re-export of U.S.-origin technology to Iran. More recently, in July 2017 OFAC agreed to a $12 million settlement with a Singaporean company who was using the U.S. financial system to export non-U.S. origin goods and services to Iran. It was the first time a non-U.S., non-financial institution was targeted for “causing” U.S. persons (in this case, U.S. banks) to violate U.S. sanctions.

As these cases make clear, OFAC is expanding the scope of its jurisdiction and actively targeting third-country entities. U.S. exporters are not immune from more aggressive enforcement of U.S. sanctions laws, however – in June 2017, the U.S. Circuit Court of Appeals for the District of Columbia upheld OFAC’s 2014 civil penalty against Epsilon Electronics, Inc., a U.S. manufacturer of audio and video equipment, for sending goods to a third-country distributor with reason to know the goods were destined for Iran. The Court held that OFAC did not actually need to determine or prove the goods themselves ended up in Iran in order to find a violation.

This webinar will cover OFAC enforcement trends from the perspective of both U.S. exporters and third-country exporters dealing in U.S. origin goods or dealing with the U.S. financial system. Participants will also learn about potential areas of liability, as well as how to approach the decision to voluntarily disclose such conduct to OFAC.

This webinar will cover the following:

• OFAC enforcement trends for 2017

• Expanded jurisdiction targeting third country exporters

• Additional bases of liability for U.S. exporters

• Mitigating factors in the assessment of civil penalties

• When and what to voluntarily disclose

Who should attend the webinar: US manufacturers with potential or existing overseas markets, U.S. exporters, non-U.S. exporters dealing in U.S. origin products or with the U.S. financial system, businesses interested in exploring new opportunities in Iran, Russia and Crimea, or Sudan.

This webinar will include PowerPoint slides and live video with commentary from Sean Kane, counsel in Hughes Hubbard’s International Trade practice. He is a former Deputy Assistant Director for Policy in the Office of Foreign Assets Control (OFAC) in the U.S. Department of the Treasury, where he played a leading role in several high-profile sanctions initiatives, including the development and implementation of the Russia sanctions program and the recent easing of sanctions against Sudan. Webinar participants are invited to submit questions during the webinar. The final 30 minutes of the webinar will be allotted to answering attendees' questions.