DAG Monaco: Sanctions should be ‘at the forefront’ of compliance approach

“For any multinational corporation—indeed, for any business with an international supply chain—sanctions should be at the forefront of its approach to compliance,” Deputy Attorney General Lisa Monaco said in virtual remarks delivered at a Global Investigations Review event Thursday. “Every company needs to be pressure-testing its sanctions compliance program, for instance through risk assessments, technology upgrades, and industry benchmarking. Every board of directors of such a company should be inquiring whether it is conducting necessary oversight of the company’s sanctions controls. Every corporate officer should be committed to ensuring they have the programs, culture, personnel, and counsel to identify problem areas and navigate the rapidly changing landscape.

“And for anyone who seeks to evade sanctions, the warning is simple: The Justice Department is coming for you.”

U.S. regulators have stressed sanctions enforcement as an area of heightened focus since Russia invaded Ukraine on Feb. 24. Within a week, the Justice Department announced the launch of Task Force KleptoCapture to investigate and prosecute sanctions violators, including the institutions that unwittingly provide those individuals or entities blocked with a path to avoiding the restrictions upon them. The agency, along with the Treasury Department, is also involved in the Russian Elites, Proxies, and Oligarchs Task Force that features more than a handful of key international allies.

Monaco raised eyebrows in April when she referred to sanctions as being “the new FCPA,” which is no light designation given the Foreign Corrupt Practices Act’s global prominence among enforcement tools. On Thursday, she expanded on the comment.

“The growth of sanctions enforcement follows the path that the FCPA traveled before it,” she said. “Both FCPA and sanctions enforcement are relevant to an expanding number of industries. They have extended beyond just U.S. actions to an increasingly multilateral enforcement regime. And they both reward companies that develop the capacity to identify misconduct within the organization and then come forward and voluntarily disclose that misconduct to the department.”

Regarding self-disclosure, Monaco noted such a practice “can save a company hundreds of millions of dollars.” She referenced last year’s case against SAP, where the German software company avoided a fine from the Justice Department and was ordered to pay $5.14 million in disgorgement after voluntarily coming forward regarding Iran sanctions violations.

“For any company that thinks it may have a sanctions problem, I have a clear, unequivocal message for you: pick up the phone and call us. Do not wait for us to call you,” Monaco said.

Any company that crosses the Justice Department’s radar—either voluntarily or through investigation—can also expect resource support toward compliance to be an area upon which it is judged.

“For those truly committed to promoting a corporate culture that values and invests in compliance—rather than begrudges or under-resources it—the department stands ready to work with you to do what we can to promote and reward such cultures,” Monaco said.