The Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Tuesday announced a $5,000 settlement with a U.S. person for apparent sanctions violations—a reminder the regulator can pursue enforcement against individuals in addition to companies.
The enforcement against an individual is the first announced by OFAC in its online resource center since June 13, 2019. Prior to that, OFAC hadn’t announced a settlement with an individual for apparent sanction violations since January 2017.
In the case announced Tuesday, the U.S. person, a civilian direct hire of the U.S. Army stationed at the U.S. embassy in Bogota, Colombia, engaged in at least 24 transactions to the benefit of a foreign individual who was a specially designated narcotics trafficker (SDNT) at the time. “The apparent violations arose out of a personal relationship that U.S. Person-1 maintained with the specially designated narcotics trafficker while U.S. Person-1 was stationed overseas at a U.S. embassy,” according to OFAC.
The apparent violations took place between approximately October 2015 and August 2016, OFAC states. The transactions included the purchase of jewelry, meals, clothing, hotel rooms, and other gifts while the SDNT was seeking to have their designation removed. The U.S. person was aware of the SDNT’s designated status, according to OFAC, even searching the Internet in an attempt to verify the legality of the transactions between the two.
The U.S. person did not voluntarily disclose the transactions to OFAC, which deemed the case “egregious.” Among mitigating factors in determining the $5,000 fine value was the person’s removal from their government post and separate disciplining by the U.S. Army, in addition to their lack of experience with matters of sanctions compliance.
“All U.S. persons, including members of the military and civil service stationed abroad, should exercise caution before voluntarily engaging in relationships with foreign persons that the U.S. person knows, or reasonably should know, may have a sanctions nexus, as any financial transaction or exchange of goods or services with a designated person—even in the context of a personal relationship—may constitute a violation of U.S. sanctions,” OFAC stated.