Part 505—Sanctions Penalties Regulations

§ 505.101 Relation of this part to other laws and regulations.

This part sets forth standard sanctions penalty regulations applicable to transactions regulated pursuant to other parts codified in this chapter, as well as to economic sanctions programs for which implementation and administration are delegated to OFAC. Substantive prohibitions, definitions, interpretations, and licenses particular to each economic sanctions program are not contained in this part but are set forth in the particular part of this chapter dedicated to that program and OFAC's website, https://ofac.treasury.gov, or, in the case of economic sanctions programs not yet implemented in regulations, in the applicable Executive order or other authority. Violations of certain economic sanctions programs are subject to additional penalties; information about these will be found in the particular part of this chapter dedicated to that program.

§ 505.102 Certain civil penalties information released.

(a) After the conclusion of a civil penalties proceeding that results in either the imposition of a civil monetary penalty or a settlement agreement, OFAC shall make available to the public certain information on a routine basis, not less frequently than monthly, as follows:

(1) In each such proceeding against an entity, OFAC shall make available to the public:

(i) The name and location of the entity involved;

(ii) The sanctions program(s) involved;

(iii) A brief description of the violation or apparent violation;

(iv) A clear indication whether the proceeding resulted in a settlement agreement or the imposition of penalties;

(v) An indication whether the entity voluntarily disclosed the violation or apparent violation to OFAC; and

(vi) The amount of the penalty imposed or the amount of the agreed settlement.

(2) In such proceedings against individuals, OFAC shall release on an aggregate basis:

(i) The number of penalties imposed and settlement agreements reached;

(ii) The sanctions program(s) involved;

(iii) A brief description of the violations or apparent violations;

(iv) A clear indication whether the proceedings resulted in settlement agreements or in the imposition of penalties; and

(v) The amounts of the penalties imposed and the amounts of the agreed settlements.

(b) The medium through which information will be made available to the public is OFAC's website at https://ofac.treasury.gov.

(c) The information made available pursuant to paragraph (a) of this section shall generally not include the following:

(1) The name of any violator or alleged violator who is an individual.

(2) Records or information obtained or created in the implementation of part 598 of this chapter.

(d) On a case-by-case basis, OFAC may release additional information concerning a particular civil penalties proceeding.

§ 505.103 Paperwork Reduction Act notice.

For approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information collections relating to recordkeeping and reporting requirements, licensing procedures, and other procedures, see § 501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

§ 505.201 Definitions.

This part includes terms that may differ among various sanctions regulations administered by OFAC. When analyzing a procedure, penalty, or transaction, the appropriate definition is the one contained in the part relating to the associated sanctions regulations. In the case of economic sanctions programs for which implementation and administration are delegated to OFAC but for which regulations have not yet been issued, the definitions of terms in this part are governed by definitions contained in the implementing statute or Executive order.

§ 505.202 IEEPA.

The term IEEPA means the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

§ 505.203 OFAC.

The term OFAC means the Department of the Treasury's Office of Foreign Assets Control.

§ 505.401 Penalties.

(a) The penalties available under section 206 of IEEPA (50 U.S.C. 1705) are applicable to violations of the provisions of any regulation, ruling, instruction, order, directive, or license issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to the applicable part of this chapter or otherwise under IEEPA.

(1) A civil penalty not to exceed the amount set forth in section 206 of IEEPA may be imposed on any person who violates, attempts to violate, conspires to violate, or causes a violation of any regulation, ruling, instruction, order, directive, license, or prohibition issued under IEEPA.

(2) IEEPA provides for a maximum civil penalty not to exceed the greater of $377,700 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.

(3) A person who willfully commits, willfully attempts to commit, willfully conspires to commit, or aids or abets in the commission of a violation of any regulation in the applicable part of this chapter, ruling, instruction, order, directive, license, or prohibition may, upon conviction, be fined not more than $1,000,000, or if a natural person, be imprisoned for not more than 20 years, or both.

(b)(1) The civil penalties provided in IEEPA are subject to adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note, Pub. L. 101-410, as amended).

(2) The criminal penalties provided in IEEPA are subject to adjustment pursuant to 18 U.S.C. 3571.

(c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or makes any materially false, fictitious, or fraudulent statement or representation; or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry shall be fined under title 18, United States Code, imprisoned, or both.

§ 505.402 Pre-Penalty Notice; settlement.

(a) When required. If OFAC has reason to believe that there has occurred a violation of any provision of the applicable part of this chapter or a violation of the provisions of any regulation, ruling, instruction, order, directive, or license issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to the applicable part of this chapter or otherwise under IEEPA and determines that a civil monetary penalty is warranted, OFAC will issue a Pre-Penalty Notice informing the alleged violator of the agency's intent to impose a monetary penalty. A Pre-Penalty Notice shall be in writing. The Pre-Penalty Notice may be issued whether or not another agency has taken any action with respect to the matter. For a description of the contents of a Pre-Penalty Notice, see appendix A to part 501 of this chapter.

(b) Response—(1) Right to respond. An alleged violator has the right to respond to a Pre-Penalty Notice by making a written presentation to OFAC. For a description of the information that should be included in such a response, see appendix A to part 501 of this chapter.

(2) Deadline for response. A response to a Pre-Penalty Notice must be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit a response within 30 days shall be deemed to be a waiver of the right to respond.

(i) Computation of time for response. A response to a Pre-Penalty Notice must be postmarked or date-stamped by the U.S. Postal Service (or foreign postal service, if mailed abroad) or courier service provider (if transmitted to OFAC by courier), or dated if sent by email, on or before the 30th day after the postmark date on the envelope in which the Pre-Penalty Notice was mailed or date the Pre-Penalty Notice was sent by email. If the Pre-Penalty Notice was personally delivered by a non-U.S. Postal Service agent authorized by OFAC, a response must be postmarked or date-stamped on or before the 30th day after the date of delivery.

(ii) Extensions of time for response. If a due date falls on a Federal holiday or weekend, that due date is extended to include the following business day. Any other extensions of time will be granted, at the discretion of OFAC, only upon specific request to OFAC.

(3) Form and method of response. A response to a Pre-Penalty Notice need not be in any particular form, but it must be typewritten and signed by the alleged violator or a representative thereof (electronic signature is acceptable), contain information sufficient to indicate that it is in response to the Pre-Penalty Notice, and include the OFAC identification number listed on the Pre-Penalty Notice. The response must be sent to OFAC's Enforcement Division by mail, courier, or email and must be postmarked or date-stamped in accordance with paragraph (b)(2) of this section.

(c) Settlement. Settlement discussion may be initiated by OFAC, the alleged violator, or the alleged violator's authorized representative. For a description of practices with respect to settlement, see appendix A to part 501 of this chapter.

(d) Guidelines. Guidelines for the imposition or settlement of civil penalties by OFAC are contained in appendix A to part 501 of this chapter.

(e) Representation. A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with OFAC prior to a written submission regarding the specific allegations contained in the Pre-Penalty Notice must be preceded by a written letter of representation, unless the Pre-Penalty Notice was served upon the alleged violator in care of the representative.

§ 505.403 Penalty imposition.

If, after considering any written response to the Pre-Penalty Notice and any relevant facts, OFAC determines that there was a violation by the alleged violator named in the Pre-Penalty Notice and that a civil monetary penalty is appropriate, OFAC may issue a Penalty Notice to the violator containing a determination of the violation and the imposition of the monetary penalty. For additional details concerning issuance of a Penalty Notice, see appendix A to part 501 of this chapter. The issuance of the Penalty Notice shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in Federal district court.

§ 505.404 Administrative collection; referral to United States Department of Justice.

In the event that the violator does not pay the penalty imposed pursuant to IEEPA or make payment arrangements acceptable to OFAC, the matter may be referred for administrative collection measures by the Department of the Treasury or to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a Federal district court.

§ 505.405 Findings of Violation.

(a) When issued. (1) OFAC may issue an initial Finding of Violation that identifies a violation if OFAC:

(i) Determines that there has occurred a violation of any provision of the applicable part of this chapter, or a violation of the provisions of any regulation, ruling, instruction, order, directive, or license issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to the applicable part of this chapter or otherwise under IEEPA;

(ii) Considers it important to document the occurrence of a violation; and

(iii) Based on the guidelines contained in appendix A to part 501 of this chapter, concludes that an administrative response is warranted but that a civil monetary penalty is not the most appropriate response.

(2) An initial Finding of Violation shall be in writing and may be issued whether or not another agency has taken any action with respect to the matter. For additional details concerning issuance of a Finding of Violation, see appendix A to part 501 of this chapter.

(b) Response—(1) Right to respond. An alleged violator has the right to contest an initial Finding of Violation by providing a written response to OFAC.

(2) Deadline for response; default determination. A response to an initial Finding of Violation must be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit a response within 30 days shall be deemed to be a waiver of the right to respond, and the initial Finding of Violation will become final and will constitute final agency action. The violator has the right to seek judicial review of that final agency action in Federal district court.

(i) Computation of time for response. A response to an initial Finding of Violation must be postmarked or date-stamped by the U.S. Postal Service (or foreign postal service, if mailed abroad) or courier service provider (if transmitted to OFAC by courier), or dated if sent by email, on or before the 30th day after the postmark date on the envelope in which the initial Finding of Violation was served or date the Finding of Violation was sent by email. If the initial Finding of Violation was personally delivered by a non-U.S. Postal Service agent authorized by OFAC, a response must be postmarked or date-stamped on or before the 30th day after the date of delivery.

(ii) Extensions of time for response. If a due date falls on a Federal holiday or weekend, that due date is extended to include the following business day. Any other extensions of time will be granted, at the discretion of OFAC, only upon specific request to OFAC.

(3) Form and method of response. A response to an initial Finding of Violation need not be in any particular form, but it must be typewritten and signed by the alleged violator or a representative thereof (electronic signature is acceptable), contain information sufficient to indicate that it is in response to the initial Finding of Violation, and include the OFAC identification number listed on the initial Finding of Violation. The response must be sent to OFAC's Enforcement Division by mail, courier, or email and must be postmarked or date-stamped in accordance with paragraph (b)(2) of this section.

(4) Information that should be included in response. Any response should set forth in detail why the alleged violator either believes that a violation of the regulations did not occur and/or why a Finding of Violation is otherwise unwarranted under the circumstances, with reference to the general factors affecting administrative action set forth in the guidelines contained in appendix A to part 501 of this chapter. The response should include all documentary or other evidence available to the alleged violator that supports the arguments set forth in the response. OFAC will consider all relevant materials submitted in the response.

(c) Determination—(1) Determination that a Finding of Violation is warranted. If, after considering the response, OFAC determines that a final Finding of Violation should be issued, OFAC will issue a final Finding of Violation that will inform the violator of its decision. A final Finding of Violation shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in Federal district court.

(2) Determination that a Finding of Violation is not warranted. If, after considering the response, OFAC determines a final Finding of Violation is not warranted, then OFAC will inform the alleged violator of its decision not to issue a final Finding of Violation.

(d) Representation. A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with OFAC prior to a written submission regarding the specific alleged violations contained in the initial Finding of Violation must be preceded by a written letter of representation, unless the initial Finding of Violation was served upon the alleged violator in care of the representative.

§ 505.501 Penalties.

(a) Section 5(b) of the United Nations Participation Act, as amended (UNPA) (22 U.S.C. 287c(b)), provides that any person who willfully violates or evades or attempts to violate or evade any order, rule, or regulation issued by the President pursuant to section 5(a) of the UNPA shall, upon conviction, be fined not more than $1,000,000 or, if a natural person, be imprisoned for not more than 20 years, or both.

(b) Violations involving transactions described in section 203(b)(1), (3), and (4) of IEEPA shall be subject only to the penalties set forth in paragraph (a) of this section.