Responding to an OFAC Civil Investigative Demand (Administrative Subpoena)
So your probably sitting there with this administrative subpoena from the Office of Foreign Assets Control and your stomach is in absolute knots. Maybe you did business with someone on a sanctions list. Maybe you processed payments through countries you shouldn’t have. Or maybe your just caught up in there latest sanctions enforcement sweep. Look, we get it. Your ABSOLUTELY TERRIFIED. And you should be! Because OFAC civil penalties can reach $20 MILLION per violation and willful violations mean 20 YEARS in federal prison!
What Is OFAC and Why Are They So Powerful?
Let me explain the international nightmare your facing. OFAC enforces U.S. economic sanctions against foreign countries, terrorists, and drug traffickers with authority that spans the entire global financial system!
OFAC doesn’t just target obvious bad actors – they destroy legitimate businesses that accidentally violate there incredibly complex sanctions programs! Over 30 different sanctions programs covering countries like Iran, Russia, Cuba, North Korea, Syria, and dozens more! The Specially Designated Nationals (SDN) List contains thousands of individuals and companies you can’t do business with. And it changes DAILY!
Here’s what’s really scary – strict liability means you don’t need criminal intent to be destroyed! Didn’t know your customer was on the SDN list? Too bad! Didn’t realize that wire went through a sanctioned country? YOUR STILL LIABLE! We’ve seen companies pay millions for transactions they had no idea violated sanctions!
How Crushing Are OFAC Penalties?
Hold onto something because these numbers will bankrupt your entire company! OFAC penalties are absolutely devastating and designed to destroy violators:
Civil penalties for 2024 reach $356,579 per non-egregious violation! But “egregious” violations? The statutory maximum is the GREATER of $2,040,229 or TWICE the transaction value! Had a $10 million deal with the wrong party? That’s a $20 MILLION penalty!
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(212) 300-5196Criminal penalties for willful violations add up to $1 million in fines and 20 years in federal prison! And here’s what’s terrifying – each transaction, each wire, each payment is a SEPARATE violation! We’ve seen companies face $50 million in penalties for what they thought were routine international transactions!
What Triggers OFAC Investigations?
Your probably wondering “How did they find out about my international business?” Let me tell you what puts companies in OFAC’s crosshairs:
Banks file Suspicious Activity Reports (SARs) for any transaction involving sanctioned countries or parties. Even if the transaction is blocked, you still get investigated! Financial institutions have automated screening systems that flag anything remotely connected to sanctions targets.
Todd Spodek
Lead Attorney & Founder
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
You receive a thick envelope from OFAC containing a Civil Investigative Demand requiring you to produce five years of transaction records, compliance policies, and internal communications related to wire transfers your import company sent through a bank in the UAE that allegedly routed funds to a Specially Designated National. The CID gives you 30 days to respond, but the volume of documents they're requesting is staggering and some of the records may contain information that could expose you to further liability.
Can I push back on the scope of this OFAC administrative subpoena, or do I have to turn over everything they're asking for?
You absolutely have the right to negotiate the scope of an OFAC Civil Investigative Demand under the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1702, and the relevant Executive Orders governing the specific sanctions program at issue. We can file a petition to modify or quash overly broad requests under the Administrative Procedure Act, and we can work with OFAC's enforcement division to narrow the production to what's truly relevant while protecting privileged attorney-client communications and work product. What's critical right now is that you do not ignore the CID or its deadline, because failure to comply can result in federal court enforcement actions and penalties up to $356,579 per violation under OFAC's current penalty guidelines. We need to immediately implement a litigation hold on all responsive documents and begin a strategic review of what to produce, what to challenge, and whether a voluntary self-disclosure under OFAC's enforcement guidelines might actually reduce your exposure.
This is general information only. Contact us for advice specific to your situation.
Voluntary self-disclosures from competitors trying to eliminate you from international markets! Whistleblowers inside your company who think there getting a big payday! Due diligence during mergers that uncovers past violations! Even routine audits can trigger mandatory reporting to OFAC!
The really unfair part? OFAC uses “administrative subpoenas” that don’t require court approval! They can demand any documents they want just by sending you a letter! No judge, no probable cause, just unlimited fishing expeditions into your business!
