The Office of Foreign Assets Control is a branch of the U.S. Department of the Treasury. It’s tasked with leveraging economic and trade sanctions based on national security goals and US foreign policy. The governmental agency uses these sanctions to help prevent threats to the US from getting financial help and support.

Just recently, the OFAC has imposed a penalty of over $7.5 million on State Street Corporation. According to investigative reports, the company is accused of manipulating the dates on invoices in an attempt to continue doing business with specifically sanctioned Russian entities. Since the company reportedly changed the dates on invoices, it’s believed that they must have been aware of Executive Order 13662.

Executive Order 13662 was implemented way back in 2014 in response to Russia’s actions in Ukraine. The intended impact of these sanctions was to put pressure on certain sectors within the US economy. As you can imagine, subverting these sanctions not only provided those sectors with the resources they needed to continue to thrive, but it also undermined the US government’s goal of stopping Russian aggression.

What’s more, State Street Corporation is specifically implicated in this scheme since they’re currently the largest financial service and asset management company in the world. That said, the company should be well aware of OFAC sanctions, what they mean, and how to avoid them. It’s suspected that State Street intentionally shifted dates around on invoices dating all the way back to the first directive. If the dates on those invoices had been correct, then all of the transactions would have been prohibited under the sanctions.

In response to the breach, State Street will need to pay a $7.5 million penalty. The company’s reputation will also suffer massively as a result of their actions.

How to Handle OFAC Sanctions

If you’re a US company that conducts business, then you need to be aware of OFAC sanctions and how they could impact your company. In general, most US companies won’t have to worry about doing business with a sanctioned individual, company, or country, but if your business is international or you handle significant products, then you need to do your due diligence.

If you’re suspicious that you might be doing transactions with a sanctioned country or individual, then you can verify your thoughts using the OFAC sanctions list search tool.

Clearly, as in the case above, a sanctions violation will cost you big time. Your business will be heavily fined, usually totaling millions of dollars. On top of that, though, you could also face imprisonment, the seizure of specific business assets, the forfeiture of funds and earnings, and suffer a serious blow to your business’s reputation.

Typically, it’s very hard for the average company to come back from an OFAC sanctions violation. This type of accusation is usually enough to derail your business goals entirely.

One of the best ways to avoid that from happening to you is to hire a solid legal advisor who can help your company stay compliant. Schedule a call with our team of international lawyers to discuss your business’s needs.