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Treasury’s OFAC Unveils Framework for Sanctions Compliance in Bermuda

Washington, May 2, 2019 - The Office of Foreign Assets Control (OFAC) at the Department of the Treasury has published a framework for sanctions compliance commitments to guide organizations subject to US jurisdiction and foreign entities conducting business with or through the United States.

Why is Sanctions Compliance Important?

US authorities continue to strengthen their sanctions programs, and ensuring private sector companies implement strong compliance programs that protect the US financial system from abuse is crucial. As Sigal P. Mandelker, Under Secretary for Terrorism and Financial Intelligence, emphasizes:

“As the United States enhances its sanctions programs, ensuring private sector companies implement strong compliance programs that protect the US financial system from abuse is crucial.”

The Framework Outlines Essential Components

The framework outlines essential components of a sanctions compliance program, including:

  • A sanctions compliance program that includes policies and procedures for detecting and preventing violations
  • Training for employees on sanctions laws and regulations
  • Risk assessments to identify potential sanctions risks
  • Monitoring and reporting of sanctions-related transactions

OFAC’s Commitment to Engagement

The document highlights OFAC’s commitment to engaging with the private sector to promote understanding of and compliance with sanctions requirements. As Andrea M. Gacki, Director of the Office of Foreign Assets Control, notes:

“We developed this framework in our ongoing effort to strengthen sanctions compliance practices across the board. It underscores our dedication to working with the private sector to further promote compliance with sanctions.”

Incorporating Components into Investigations and Settlement Processes

The framework also outlines how OFAC may incorporate its components into investigations and settlement processes.

Analysis of Root Causes of Apparent Violations

An appendix provides analysis on root causes of apparent violations of US economic and trade sanctions programs identified during investigative processes.

Implications for Bermuda-Based Companies

With this move, Bermuda-based companies must take note of the importance of adhering to OFAC’s sanctions compliance regulations to avoid potential penalties and reputational damage.