What is IEEPA and how is it used in sanctions enforcement?+
The International Emergency Economic Powers Act authorizes the President to regulate international commerce during a national emergency. It is the statutory basis for most OFAC sanction programs and creates criminal liability for willful violations, including transactions with designated persons and sanctioned countries. Criminal IEEPA charges can carry up to 20 years imprisonment.
A business partner was designated by OFAC this morning. What must we do in the next 24 hours?+
A new OFAC designation creates immediate legal obligations. Within 24 hours: (1) Block all assets; freeze all property and property interests of the newly designated person or entity that are in your possession or control. This is a legal obligation, not a business decision. Failing to block designated assets is itself an OFAC violation; (2) Reject pending transactions; any pending payment or transaction involving the designated party must be rejected or blocked; (3) File a blocking report with OFAC within 10 business days if you block any property; (4) Notify counsel with sanctions expertise; OFAC regulations are complex, and the reach of a designation including affiliates, subsidiaries, and related parties requires legal analysis; (5) Review your full business relationship with the designated party; all contracts, open payments, and ongoing transactions need to be assessed for sanctions exposure. Do not complete any new transaction involving the designated party even if it was entered into before the designation; OFAC regulations apply from the moment of designation. Voluntary self-disclosure of sanctions violations can significantly reduce civil penalties.
What is the difference between OFAC civil enforcement and criminal sanctions prosecution?+
OFAC imposes civil penalties on a strict-liability basis: a prohibited transaction can draw a penalty even if no one intended to violate sanctions. Criminal prosecution, handled by the DOJ under IEEPA, requires a willful violation and can result in imprisonment and much larger fines. The distinction drives strategy, because conduct that looks like a manageable civil matter can become criminal where the government sees knowledge, concealment, or false statements, and voluntary self-disclosure to OFAC substantially mitigates civil exposure.
Can someone be removed from the OFAC sanctions list?+
Yes, there is a formal path. A designated person or entity can petition OFAC for reconsideration, presenting evidence that the basis for the designation is wrong or no longer applies, and can challenge a designation in federal court under the Administrative Procedure Act. The process is slow and document-intensive, but delistings happen regularly, and litigation pressure has produced results where petitions stall.
