OFAC to Apply Multiyear Inflationary Increase to Recordkeeping, Reporting Penalty Amounts

The Office of Foreign Assets Control will adjust for inflation some civil monetary penalties, it said in an interim final rule released Sept. 2. The changes apply to “penalties for failure to comply with certain recordkeeping and reporting requirements, which are contained in OFAC’s Economic Sanctions Enforcement Guidelines in OFAC’s Reporting, Procedures and Penalties Regulations,” it said. Increases are effective Oct. 5.

The agency has issued annual penalty adjustments since 2016 but mistakenly omitted penalties for recordkeeping and reporting violations for those years, it said. The new 2020 adjustments will apply to “associated violations that occurred after November 2, 2015 for which penalties were assessed on or after” Oct. 5, it said. “Although other notice and comment procedures are not required, OFAC invites comments on this rule related to the catch-up adjustment only,” it said. Comments are due Oct. 5.

The new maximum penalty for failure to furnish information regardless of whether any other violation is alleged will be $23,765, up from the 2016 amount of $20,000, it said. The maximum penalty for failure to provide information “where OFAC has reason to believe that the apparent violation(s) involves a transaction(s) valued at greater than $500,000, irrespective of whether any other violation is alleged,” will be $59,413, up from $50,000. Maximum penalties for “failure to maintain records in conformance with the requirements of OFAC’s regulations or of a specific license” will rise from $50,000 to $59,522. Late filing penalties will also increase, it said.