OFAC Symposium 2019 – Maximum Pressure and Who’s Feeling It

Oscar Enriquez, CAMS, CPAML, MBA
February 6, 2020
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After a three-year hiatus, the highly anticipated OFAC Symposium provided a wealth of information to financial institutions, attorneys, government officials and other attendees in a closed-to-the-press event. 

The Office of Foreign Assets Control (OFAC) hosts an annual symposium to provide updates on compliance requirements, sanctions activity, and enforcement efforts. This year’s event highlighted current geopolitical challenges and OFAC’s “maximum pressure strategy” to address these tensions, in addition to discussing the Framework of OFAC Compliance Commitments released earlier this year. OFAC restated its crucial role in furthering U.S. foreign policy and national security goals to secure the global financial system and protect the United States from the threats of terrorism, human and drug trafficking, and economic damages.

What does a “maximum pressure strategy” entail?

As a front-line of defense, OFAC has strengthened its enforcement actions under the current administration and is targeting the most prolific economic sectors within nations of interest with a “maximum pressure” strategy to identify and starve bad actors. OFAC has been primarily focused on all economic and trade activity stemming from Iran, Russia, Cuba, North Korea, and Venezuela, as well as the trafficking of narcotics fueling the opioid crisis.

For example, with respect to economic sanctions against Iran, OFAC is keeping a close watch on the petrochemicals and metals industries. Trade of these goods provides the highest financial gain to the Iranian government, which has been identified as a state sponsor of terrorism and supporter of ballistic missile programs.

To strengthen the sanctions enforcement regime in the shipping industry, OFAC has enhanced its compliance controls in the maritime industry, working closely with Flag Registries in Liberia and Panama to track flagged vessels that may be illicitly transporting goods. Maritime businesses attempting to evade economic sanctions by operating in various jurisdictions may include shipping companies, vessel owners, managers, operators, insurers, and financial institutions.

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More OFAC sanctions activity than ever before

As part of its aggressive “maximum pressure” strategy, OFAC has also increased sanctions activity. They are watching closely and have had success in identifying illegal activity across various sectors, including distribution and financial services. However, all industry sectors have had to boost their remediation efforts to keep up. Some recent enforcement examples have included cases in oil and metals trade, Jamal Trust BankCOSTCO Shipping and subsidiaries, and several actions against known oligarchs.

In a historic partnership, the United States and the seven member nations of the Terrorist Financing Targeting Center (TFTC) are working together in the fight against terrorist financing. Most recently, the TFTC took “significant actions to expose and disrupt Taliban actors and their Iranian sponsors” who sought to “undermine the security of the Afghan Government” through the designation of 25 targets affiliated with the Iranian regime. Through international collaboration and joint sanctions, TFTC has successfully identified and stopped several members of the Taliban and those who support their lethal activity in South Asia and across the globe.

In addition to distribution and financial services, OFAC will strengthen its watch of digital and virtual currencies, intellectual property, goods sold to U.S. military, supply chain control, commerce control lists, and shipping routes through Liberia and Panama.

OFAC modernizes communication to improve efficiency

OFAC recognizes the importance of streamlining their process and reporting requirements to increase efficiency. Global communication is key to achieving their objectives, and the private sector is a key ally. OFAC asks that businesses take action within their own company and across their sectors to identify potential risks. A more proactive strategy may include insuring shipping, reviewing shipping documents often and in detail, and avoiding potentially suspicious interaction with high-risk jurisdictions such as North Korea.

In addition to strengthening partnerships with countries around the world to facilitate more impactful and comprehensive actions, OFAC has also modernized their reporting and increased flexibility. They have launched a new electronic reporting capability that enhances authorities’ ability to combat terrorism throughout the globe while still allowing humanitarian aid to reach affected populations within targeted nations. As part of this initiative, they have announced that humanitarian aid applications will move to the top of their priority list and will be reviewed first.   

OFAC is working diligently to continue evolving and facilitating collaboration across countries and all industry sectors to starve bad actors, impede corrupt regimes, and keep the world safe.

Business owners and compliance professionals need to remain vigilant about potential risks and report suspicious activity to OFAC and pertinent agencies. If you have questions about sanctions compliance or new regulations, contact us or another member of our risk advisory services team.

About the Author

Oscar Enriquez, CAMS, CPAML, MBA

Oscar Enriquez, CAMS, CPAML, MBA, is a risk advisory services manager at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S. You can reach Oscar at oenriquez@kaufmanrossin.com.

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