Whenever an entity, whether a company or an individual, conducts business with a SDN, it violated the International Emergency Economic Powers Act (IEEPA), a federal criminal statute that carries penalties of up to 20 years in prison and a fine of up to $1,000,000. Civil penalties are virtually unlimited. The largest civil penalty imposed thus far is $8.9 billion. This penalty was imposed on BPN Paribas, a French bank, for violating Iranian sanctions. The consequences of an IEEPA violation are significant.
There are a couple of ways that a party may become aware of a possible IEEPA violation. One is through a whistleblower, audit or some other internal sources. If a company becomes aware of a potential IEEPA violation, it should seek the assistance of qualified counsel experienced in this area immediately. Qualified counsel will then most likely recommend an internal investigation to determine the facts surrounding an alleged violation. Sometimes, the investigation will determine that there was, in fact, no violation. Other times, the investigation will reveal a violation of the IEEPA. If this is the case, the company will need to determine what corrective measures are appropriate. In some cases, the company may decide to make a Voluntary Self-Disclosure to OFAC. The Voluntary Self-Disclosure may limit penalties that would otherwise be assessed against the entities.
The other way that a party may learn of a potential IEEPA violation is through the government itself, whether it be by way of subpoena, search warrant, visit from federal authorities or target letter from the Department of Justice. The existence of an investigation poses as a possible existential threat to a company and a significant loss of freedom to an individual. The target must obtain experienced counsel to help it through the investigation and to defend it at trial.
We have extensive experience in white collar criminal defense matters. Please give us a call if you have any questions. The sooner we become involved in a matter, the greater the opportunity for a positive outcome.