OFAC Sectoral Sanctions | Russia Ukraine and Venezuela

OFAC sectoral sanctions are a new category of sanctions. The US has had secondary sanctions, list-based sanctions, and country-based sanctions, but this is the new category that OFAC introduced and began using in the Ukraine-related Sanctions and arguably in a more targeted fashion the Venezuela-related Sanctions. For more information on the recent changes, contact a sectoral sanctions attorney who can try to answer any questions or concerns you may have.

Sectoral vs. Traditional Sanctions

The difference between OFAC sectoral sanctions and traditional sanctions is the entities on a sectoral sanctions identification list are not subject to blanket prohibitions. In fact, citizens of the United States are prohibited from engaging with those persons in sectoral-specific transactions.

The Ukraine-related sanctions program was the first of its kind to have sectoral sanctions and it specifically targeted Russia’s financial and energy sectors.

Specific types of transactions, such as financial and energy-related transactions, are prohibited for US persons and, like the Venezuelan sanctions, the OFAC 50 percent rule is strictly enforced in the context of the Ukraine-related sectoral sanctions.

Defining Compliance Programs

Experienced attorneys recommend that entities engaging the Russian financial and energy industries have a sanction compliance program in place to be able to preemptively identify transactions that may be prohibited by the U.S. government through OFAC.

Sometimes, potential clients believe that compliance is easily accomplished because OFAC has online forms, but applying for specific licenses requires a lot of due-diligence and a lot of legal research. One should consider a specific license as something similar to a court document, a legal brief that an attorney would submit in a criminal defense matter.

When a person is prosecuted criminally, they are given the option of defending themselves without an attorney so long as they waive that right to counsel. In these OFAC-related instances, the person is essentially doing the same thing by submitting an OFAC specific license without the assistance of an OFAC attorney.

Recent Case Results

OFAC Unblocking License Obtained for SDN False Positive Match

Price Benowitz’s OFAC Law Group successfully obtained an OFAC unblocking license for a client whose personal funds were blocked due to an intermediary financial institution’s false positive match to the Specially Designated Nationals List. The client’s name resembled a person on the SDN list and the funds were blocked due to a lack of timely […]
Specific License Granted for Payment from SDN List Client

The OFAC Law Group was granted an OFAC specific license to obtain payment from an SDN client. The payment structure fell outside of the authorization of the general license to receive legal fee payments from an SDN person. Law firms must review the limitations of relevant authorizations to receive payment from SDN persons. SDN list […]
Breaking False Claims Act News: Qui Tam Settlement Reached

While the defendants did not admit any fault, we are happy to report that PAE agreed to pay the United States $5,000,000 to resolve the False Claims Act allegations contained in Mr. Palombo’s Complaint.

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