USA LAW AND PRACTICE Contributed by: Seward & Kissel LLP
Regulations (EAR), which are the primary export con- trol regulations in the US. The US State Department is also responsible for administering certain economic sanctions and export controls. For example, the State Department’s Direc - torate of Defense Trade Controls (DDTC) in the Bureau of Political-Military Affairs implements the Internation - al Traffic in Arms Regulations (ITAR), pursuant to the Arms Export Control Act. 2.2 Enforcement 2.2.1 Enforcement Responsibilities OFAC is responsible for investigating and enforcing civil violations of US sanctions, and the DOJ has the authority to investigate and enforce criminal violations. Pursuant to 18 USC. § 981 (a)(1)(C), the DOJ also has the authority to seize and subject to civil forfei - ture assets involved in or relating to IEEPA violations located within the United States. Through co-opera- tion with international allies or under certain statutory authorities, as the case may be, the United States may also seize and subject to civil forfeiture such assets or property located on the high seas or abroad. 2.2.2 Breaching Sanctions Violations of US economic sanctions laws and regu- lations are primarily civil offences, but there can be criminal penalties for wilful violations. For example, under IEEPA, it is unlawful for a person to violate, attempt to violate, conspire to violate or cause a violation of any licence, order, regulation or prohibition issued under IEEPA. The penalties for such violations include imprisonment for up to 20 years and a fine of up to USD1 million. 2.2.3 Civil Enforcement Action Since June 2022, OFAC has brought 42 enforcement actions, resulting in over USD1.8 billion in settlements or penalties against domestic and foreign actors for violations of sanctions programs. Perhaps the most significant was a 2023 action brought against virtual currency trading platform Binance Holdings Ltd. (Binance). Binance settled with OFAC for USD968,618,825 for “egregious” violations
that were not voluntarily disclosed. OFAC alleged that Binance was aware that individuals from sanctioned jurisdictions were using its platform, yet it continued to match and execute trades between users from sanc- tioned jurisdictions and the US. In addition to the monetary fine, Binance was, among other things, ordered to retain a compliance moni- tor for five years to enhance its sanctions compliance program, conduct periodic risk assessments as well as develop methods to identify, analyse, and address sanctions risks, improve its IT screening, and provide regular training to employees and executives. In 2024, OFAC was active in bringing enforcement actions against companies for shipping goods to sanctioned individuals or individuals located in sanc- tioned jurisdictions. In December 2024, OFAC settled with Cordoba Music Group LLC for shipping musi - cal instruments and parts that it knew were destined for Iran. Also in December 2024, OFAC settled with SkyGeek Logistics, Inc. – a US-based aviation supply company – for shipping goods to individuals located in the United Arab Emirates that were blocked under OFAC’s Russian Harmful Foreign Sanctions Activities program. Of the four enforcement releases issued by OFAC in 2025, the most notable activity to date is OFAC’s set - tlement with GVA Capital Ltd. in June 2025, detailed above. See 1.2 Key Trends . 2.2.4 Criminal Enforcement Action Criminal sanctions enforcement activity conducted by the DOJ in the past few years has invariably focused on the US government’s most urgent national security and foreign policy goals. Some of the most notable criminals for sanctions breaches include the following. • Binance’s agreement to pay over USD4 billion to resolve the DOJ’s investigation into violations of the Bank Secrecy Act (BSA), failure to register as a money transmitting business, and sanctions viola- tions under the International Emergency Economic Powers Act (IEEPA). • Sanctions evasion actions were brought against associates and service providers of Russian oligarch Viktor Vekselberg. The group of actions
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