Eric Sandberg-Zakian, Chair of Covington’s Trade Controls Enforcement Practice Group, was quoted in a Global Investigations Review article, “OFAC Shifts Focus from Quantity to Quality,” which examines recent trends in corporate enforcement by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), including a decline in the number of corporate settlements and an increase in cases where conduct was not deemed voluntarily self-disclosed.
The article examines whether the recent decline in voluntary self-disclosure determinations reflects a change in OFAC's approach. Eric said he has not seen evidence that the agency has become less likely to give companies credit when they voluntarily disclose potential violations.
"If a company makes a voluntary disclosure, they should expect to get credit for that from OFAC, and I don't see OFAC withholding that determination based on technicalities or very stringent interpretations of the regulations," Eric said.
"To the extent the pendulum has swung more towards non-voluntary cases, I don't think it points to a reduced likelihood of granting companies voluntary disclosure credit," he added. "That would be very detrimental to the agency's sanctions enforcement programme, and I do not think that OFAC should or would move in that direction."
Eric suggested that the increase in non-voluntarily self-disclosed cases could instead reflect OFAC's own enforcement efforts and its success in identifying potential violations independently.
The article also examines the sanctions regimes most prominent in OFAC enforcement actions, noting the continued prevalence of Iran-related matters. Eric said he expects Iran sanctions to remain a significant enforcement focus.
"Iran is a perennial sanctions enforcement target because across the political spectrum, there's been a broad commitment to enforcing Iran sanctions, and that's as true today under this administration as it's ever been," Eric said.
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