New Voluntary Self-Disclosure Process for OFAC Violations

OFAC has new standards for filing a voluntary self disclosure!

My law firm has strongly recommended to many clients that there is value in voluntary reporting of export violations to the government, in order to work with the government to solve the immediate issue but also to help the government track trends and provide better compliance support to the industry.

Most voluntary self disclosure (VSD) provisions offer an incentive in the form of a mitigation of penalties. This mitigation is not guaranteed, but we’ve had very good luck in cooperation with the government through VSDs. When we file a VSD on behalf of a client, we typically work with the company on root cause analysis, and corrective actions that are targeted to the root cause. This helps to improve the chances of the corrective action being successful in preventing future recurrence of the underlying issue. It is also important to make sure you are filing your VSD with the right agency, and to recognize that there may be more than one office that needs to receive your VSD (for example some filing issues may also benefit from a Census VSD).

The processes for VSDs are typically ensconced in the regulations, and it is important to pay attention to the regulatory requirements for the VSD processes.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is launching a new online Voluntary Self-Disclosure Portal. This portal provides a streamlined, secure method for submitting voluntary self-disclosures of potential violations of OFAC-administered sanctions programs. By transitioning to this online system, OFAC aims to increase efficiency and transparency for persons submitting information, enabling faster acknowledgment of submissions, clearer communication throughout the review process, and a more user-friendly experience overall. OFAC strongly encourages parties to begin submitting voluntary self-disclosures through the new online portal.

Typically, the initial report needs to be followed by a full narrative that meets the regulatory requirements for final report. If you make an initial report and are not sure what you need in a final report, then you can review the relevant regulations in the Economic Sanctions Enforcement Guideline or contact our office for assistance. The Framework for OFAC Compliance Commitments is also a useful piece of guidance.