On July 22, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) released guidance (“Guidance”) on how it will implement the new authority it was granted in the April 24, 2024 National Security Supplemental (“the Act”).  The Act extended the statute of limitations for civil, criminal, and forfeiture violations of sanctions programs promulgated pursuant to the International Emergency Economic Powers Act (“IEEPA”) or the Trading with the Enemy Act (“TWEA”) from five to 10 years.

In the Guidance, OFAC addressed two of the larger questions the new statute of limitations raised for businesses and compliance professionals surrounding scope and recordkeeping requirements.

First, OFAC clarified that the 10-year statute of limitations applies to any civil violation of IEEPA- or TWEA-based sanctions prohibitions that was not time-barred at the time of the Act’s enactment.  In other words, OFAC may now commence enforcement actions for such violations within 10 years of the latest date of the violation, if such date was after April 24, 2019.  By way of example, here is how OFAC’s Guidance would apply depending on the date of the violation:

  • Violation occurred before April 24, 2019: Remains time-barred.
  • Violation occurred after April 24, 2019: Previously would have been subject to a five-year statute of limitations; now that time period runs for 10 years.

OFAC considers the issuance of a pre-penalty notice or finding of violation to be the commencement of an action for statute of limitation purposes, and the 10-year statute of limitations starts at the time of the most recent violation. 

Second, while OFAC has yet to amend its recordkeeping requirements, which today generally only require records to be kept for five years, OFAC anticipates publishing an interim final rule, with an opportunity to provide comment, extending the recordkeeping requirement to 10 years under 31 C.F.R. § 501.601, in order to correspond with the new statute of limitations.  OFAC anticipates the final rule will likely become effective six months after the publication.  

Tags: Enforcement, IEEPA, OFAC, Sanctions, TWEA
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Caroline Brown Caroline Brown

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to…

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to clients on national security matters, including anti-money laundering (AML) and economic sanctions compliance and enforcement challenges, investigations, and cross border transactions, including review by the Committee on Foreign Investment in the United States (CFIUS) and the Committee on Foreign Investment in the U.S. Telecommunications Services Sector (Team Telecom).

Caroline brings over a decade of experience as a national security attorney at the U.S. Departments of Justice and the Treasury. At the U.S. Department of Justice’s National Security Division, she worked on counterespionage, cybersecurity, and counterterrorism matters and investigations, and gained unique insight into issues surrounding data privacy and cybersecurity. In that role, she also sat on both CFIUS and Team Telecom and made recommendations to DOJ senior leadership regarding whether to mitigate, block, or allow transactions under review by those interagency committees. She also negotiated, drafted, and reviewed mitigation agreements, monitored companies’ compliance with those agreements, and coordinated and supervised investigations of breaches of those agreements.

Read more about Caroline Brown
Show more Show less
Photo of Dj Wolff Dj Wolff

David (Dj) Wolff is the co-chair of Crowell & Moring’s International Trade Group and a director with C&M International, the firm’s trade policy affiliate.

At Crowell & Moring, he serves on the steering committee for the International Trade Group, where his practice focuses

…

David (Dj) Wolff is the co-chair of Crowell & Moring’s International Trade Group and a director with C&M International, the firm’s trade policy affiliate.

At Crowell & Moring, he serves on the steering committee for the International Trade Group, where his practice focuses on all aspects of compliance with U.S. economic sanctions, including day-to-day compliance guidance, developing compliance programs, responding to government inquiries, conducting internal investigations, and representation during civil and criminal enforcement proceedings. Dj works regularly with non-U.S. clients, both in Europe and Asia, to evaluate the jurisdictional reach of U.S. sanction authorities to their global operations, identify and manage the potential conflict of laws that can result from that reach, as well as to support client’s design, implementation, and evaluation of a corresponding risk-based sanctions compliance program. Dj also regularly leads teams in diligence efforts on trade and related regulatory areas on behalf of his U.S. and non-U.S. clients in the M&A arena, having successfully closed more than 30 deals with an aggregate valuation of several billion dollars over the last 18 months.

Dj is ranked by Chambers USA in International Trade: Export Controls & Economic Sanctions. He has previously been recognized by Law360 as a Rising Star in International Trade (2020), by The National Law Journal as a “DC Rising Star” (2019), by Who’s Who Legal: Investigations as a “Future Leader” (2018 and 2019), Acritas Star as an Acritas Stars Independently Rated Lawyers (2019), by Global Investigations Review as one of the “40 under 40” in Investigations internationally (2017), and WorldECR as one of the five finalists for the WorldECR Young Practitioner of the Year award (2016).

Read more about Dj Wolff
Show more Show less
Related Posts
OFAC Issues Necessary and Long-Awaited Updated Guidance for (Re)Insurance Industry
November 25, 2024
OFAC Extends Recordkeeping Requirements from 5 to 10 Years Through Interim Final Rule
September 12, 2024
OFAC, State Department, and BIS Expand Russian/Belarusian Sanctions
August 28, 2024