Compliance Corner: OFAC

Editorial Staff

27 April 2020

The US , which enforces US sanctions against certain foreign countries such as Iran and Russia, has guided firms on how it will take account of the global pandemic in checking if businesses are complying with rules.

OFAC has said it understands that a company’s resources may be stretched because their employees may be ill, working remotely or furloughed.

“Organizations are facing real and serious disruptions resulting in reduced compliance staff resources - as a result, companies may not be able to properly screen customers/clients, beneficial owners and third parties before conducting new business transactions in a timely manner,” Elizabeth Slim, senior consultant at The Volkov Law Group, said in a briefing for the JDSupra website.

“It was only a matter of time before regulators and law enforcement recognized the impact that the pandemic has had on our country and our economy - The Office of Foreign Assets Control (“OFAC”) issued guidance acknowledging that the COVID-19 crisis may impact the ability of companies to ensure compliance with OFAC sanctions,” Slim wrote.

Slim noted: “To begin with, companies should have a well-documented sanctions compliance program with proper policy and procedures in place, so your organization understands its roles and responsibilities to comply with the regulations.”

“In the face of this pandemic crisis, a business continuity plan which defines all risks that may affect a company’s operations during a potential threat or crisis has a developed plan to allow the company to recover critical business functions. OFAC sanctions screening should be listed as a critical function in the BCP due to the regulatory risk and financial impact to your company,” she said.

Slim added that financial institutions and other organizations should contact OFAC as soon as possible if they are concerned about how the pandemic affects compliance.