Conventional warfare tactics would be devastating to the current global economy, so it makes sense that advanced nations have developed alternative ways to penalize each other. One of the top ways to cause problems for another country without actually being physically aggressive with our military is to create economic sanctions against our foreign adversaries.

The OFAC, the Office of Foreign Assets Control, is the American governmental group responsible for creating sanctions and upholding them. Back in May, the agency announced over 300 new sanctions that they put into place against various Russian individuals, entities, and allies. These sanctions were put into place to specifically prevent the production of Russian weapons and to prevent sanctions evasion tactics that have been employed over the past few years. Right now, Russia continues to wage war against Ukraine despite all American efforts to stop them.

One of the most notable entities sanctioned is OKO Design Bureau, which is a company that develops UAVs. The U.S. discovered that the company was using a Telegram channel where they were accepting “donations” via cryptocurrency from Russian nationals who would then receive UAV technology. Thankfully, the scheme was discovered very quickly, so OKO Design Bureau was only successful in collecting a minute sum of only $1,000 in donations.

Despite this scheme being unsuccessful, Russia continues to attempt to use cryptocurrency and online “donations” to secure weapons and support for the ongoing war.

OFAC Regulations, International Business Rules, and More

OFAC regulations are in place for a very important reason, but that doesn’t make it any easier for businesses to keep up with the latest sanctions and remain compliant. What’s more, OFAC regulations are only one aspect of the law that your business needs to be aware of and in constant adherence to. A failure to comply with the legal rules in the areas where you do business could result in criminal charges, serious financial fines, a huge hit to your company’s reputation, and potentially the closing of your business.

That said, you must vet everyone you do business with, especially if they’re a foreign national or entity, to ensure that they are not currently being sanctioned by the OFAC. If you get caught doing business with a sanctioned person or group, then you could face the following penalties:

• A prison sentence of up to 30 years
• Financial fines ranging from thousands to millions of dollars
• Civil litigation against your business for the harm caused by your transactions

Unfortunately, the fallout from the charges is also going to cause major damage to your business and brand. The best way to avoid all these problems is to be proactive in your business approach. Consider consulting with an international legal expert about your company’s needs. The right legal team will be able to provide you with a thorough analysis of your legal needs and help guide you in developing a strategy that keeps you compliant moving forward.

Schedule a meeting with our team of international legal experts now to learn more about how we can help you and your brand.