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OFAC Increases Civil Monetary Penalties for 2023 | Chicago Popular

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is increasing every civil fine within its jurisdiction by 7.7 percent for 2023. The increases went into effect January 13, 2023.1 Note that the 2023 adjustments will apply to any civil penalties assessed after the effective date, including those whose associated violation occurred before January 13, 2023.

Annual adjustments

The adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act (DCIA) of 1996, and further amended by the Federal Civil Penalties Inflation Adjustment Act of 2015. Penalties are increased based on the cost adjustment of life, i.e. the percentage by which the consumer price index (CPI) for October 2022 exceeds the CPI for October 2021.

OFAC’s annual civil fines adjustment is a good reminder for businesses to periodically review and update their fines compliance policies and procedures. OFAC clarified that given the dynamic nature of U.S. economic and trade sanctions, an effective and successful sanctions compliance program should be able to rapidly adapt to changes in the law and published guidance, including updates of the OFAC Specially Designated Nationals List (SDN) ) and Blocked Persons and new, modified or updated sanctions or prohibition programs imposed on affected foreign countries, governments, regions or persons. It is important for companies of all sizes to update their compliance assessments regularly and take into account changes in the company’s risk profile.

Increase the penalty

The increases in the maximum civil pecuniary penalties (CMP) are as follows:

Table 1 — Maximum CMP amounts for relevant statutes

Table 2 — Maximum CMP amounts for record keeping CMPs

OFAC is also implementing similar adjustments to the record-keeping CMP amounts found in its Economic Sanctions Enforcement Guidelines in Appendix A to 31 CFR Part 501.


Notes

1 OFAC, Adjustment for inflation of civil fines, 88 Federal. Reg. 2229 (January 13, 2023).

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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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