An update to the statute of limitations for sanction violations has significant implications for companies engaged in global trade. Under the International Emergency Economic Powers Act (IEEPA) and Trading with the Enemy Act (TWEA), the US government has extended the timeframe for enforcement action from 5 to 10 years. This modification, enacted on April 24, 2024, gives the Treasury Department’s Office of Foreign Assets Control (OFAC) more time to act against violators, increasing the risk of penalties for non-compliance.
OFAC Guidance and Recordkeeping Requirements
OFAC has issued guidance on the change, extending recordkeeping requirements from 5 to 10 years. An interim final rule will follow, allowing for public comments. The recordkeeping requirement will be phased in six months after OFAC publishes the interim final rule, providing a grace period for compliance.
Best Practices for Compliance
With a longer enforcement window and increased recordkeeping requirements, companies face a higher risk of penalties for non-compliance, including fines and reputational damage. To mitigate this risk, it’s essential to review and update compliance programs to meet the new requirements.
To minimize the risk of penalties and reputational damage, importers should:
– Review and update compliance programs to meet the new requirements.
– Conduct internal audits to identify potential sanction violations.
– Ensure accurate and detailed documentation of cargo, transactions, and trade activities.
Our expertise and services can help strengthen your compliance programs and reduce the risk of penalties and reputational damage associated with sanction violations. If you have questions or need assistance, reach out to Mohawk Global Trade Advisors.
By Clarissa Chiclana