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Enforcement in the United States

The United States has been by far the most active country in using sanctions and enforcing them.

OFAC is in charge of the implementation and enforcement of sanctions, yet it is not alone in its broader mission of fighting an array of illicit transactions. Other governmental bodies both at the state and federal levels cooperate closely with OFAC. OFAC also helps those bodies in achieving their goals. To name a few, OFAC closely cooperates with: 

  • Department of Justice

  • Financial Crimes Enforcement Network

  • Bureau of Industry and Security (Department of Commerce) 

  • Federal Bureau of Investigation 

  • NYDFS 

  • District Attorneys offices 

OFAC has published 14 enforcement actions so far in 2020. It is preceded by 30 enforcement actions for the year before. OFAC's active approach in enforcing the U.S. sanctions made some believe that OFAC has adopted a "compliance through enforcement" approach to ensure U.S. sanctions are respected.   

In enforcing U.S. sanctions and depending on the facts and circumstances of each case, OFAC may respond in one or more of the below ways to an apparent violation: ​

No Action

If OFAC determines that there is insufficient evidence to conclude that a violation has occurred and/or concludes that the conduct does not rise to a level warranting an administrative response, then no action will be taken.

For more information about OFAC enforcement, you can see "Economic Sanctions Enforcement Guidelines". 

Interpretation in the United States

OFAC has a lot of valuable resources designed to help individuals and entities understand the regulations better. Although none of them should be considered binding, one can find out about regulatory expectations by consulting such resources. 

Reviewing the Laws

Another piece that could be very helpful is Federal Register Notices in which OFAC provides some background information. 

Also, more and more when OFAC designates individuals there are parallel press releases by the Department of State or Treasury in which the reasons for the designation of an entity or individual are stated. Such information could be used to understand the mindset of the regulators and the political climate and U.S. priorities. 

Despite the active approach of OFAC, there are not many instances in which the U.S. judiciary is involved in OFAC's actions.

The main reason is the very high deferential standard of the review applicable to the cases in which OFAC actions are challenged. In particular, when a court reviews agency action under the Administrative Procedure Act (which governs the regulatory powers of U.S. Government agencies, OFAC in this case), the court may reverse the agency action only if it finds the action of agency arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.

DC Appeals .jpg

Furthermore, when it comes to foreign policy matters courts defer even more to the political branches of the government (The executive Branch in this case). The Supreme Court of the U.S. ruled in Harisiades v. Shaughnessy that matters relating to the conduct of foreign relations are so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference. 

In spite of the courts' high deferential to the U.S. government agencies and courts' restraint from entering into foreign policy matters, there are a number of cases related to sanctions.

To show how the courts look at sanctions-related cases, a handful of such cases are listed below. Please note that the cases below are not binding for many other courts in the United States.   

Clancy v. Office of Foreign Assets Control of the U.S. Dept. of Treasury 

United States v. Banki ​

Epsilon Electronics, Inc. v. U.S. Department of the Treasury, Office of Foreign Assets Control, et al.

Exxon Mobil Corporation et al v. Mnuchin et al.

Fulmen Company, et al. v. OFAC, et al.

Kindhearts for Charitable Humanitarian v. Geithner

Zevallos v. Obama

Al Haramain Islamic Foundation, et al v. U.S. Dept. of the Treasury, et al.

Joumaa v Mnuchin 

Rakhimov v. Gacki et al.

Fares v. Smith

Dorato v. Smith

Dresser-Rand Company v. Petroleos de Venezuela, S.A.

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