Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Rules and Regulations 51933 

1 68 FR 4422–4429 (January 29, 2003). 

2 71 FR 1971–1976 (January 12, 2006). 

§ 211.160 General requirements. 

* * * * * 

(b) * * * 

(1) Determination of conformity to 

applicable written specifications for the 

acceptance of each lot within each 

shipment of components, drug product 

containers, closures, and labeling used 

in the manufacture, processing, packing, 

or holding of drug products. The 

specifications shall include a 

description of the sampling and testing 

procedures used. Samples shall be 

representative and adequately 

identified. Such procedures shall also 

require appropriate retesting of any 

component, drug product container, or 

closure that is subject to deterioration. 

* * * * * 

■ 15. Section 211.182 is revised to read 

as follows: 

§ 211.182 Equipment cleaning and use log. 

A written record of major equipment 

cleaning, maintenance (except routine 

maintenance such as lubrication and 

adjustments), and use shall be included 

in individual equipment logs that show 

the date, time, product, and lot number 

of each batch processed. If equipment is 

dedicated to manufacture of one 

product, then individual equipment logs 

are not required, provided that lots or 

batches of such product follow in 

numerical order and are manufactured 

in numerical sequence. In cases where 

dedicated equipment is employed, the 

records of cleaning, maintenance, and 

use shall be part of the batch record. 

The persons performing and doublechecking the cleaning and maintenance 

(or, if the cleaning and maintenance is 

performed using automated equipment 

under § 211.68, just the person verifying 

the cleaning and maintenance done by 

the automated equipment) shall date 

and sign or initial the log indicating that 

the work was performed. Entries in the 

log shall be in chronological order. 

■ 16. Section 211.188 is amended by 

revising paragraph (b)(11) to read as 

follows: 

§ 211.188 Batch production and control 

records. 

* * * * * 

(b) * * * 

(11) Identification of the persons 

performing and directly supervising or 

checking each significant step in the 

operation, or if a significant step in the 

operation is performed by automated 

equipment under § 211.68, the 

identification of the person checking the 

significant step performed by the 

automated equipment. 

* * * * * 

Dated: August 22, 2008. 

Jeffrey Shuren, 

Associate Commissioner for Policy and 

Planning. 

[FR Doc. E8–20709 Filed 9–5–08; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 501 

Economic Sanctions Enforcement 

Guidelines 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: The Office of Foreign Assets 

Control (OFAC) of the U.S. Department 

of the Treasury is issuing this interim 

final rule, ‘‘Economic Sanctions 

Enforcement Guidelines,’’ as 

enforcement guidance for persons 

subject to the requirements of U.S. 

sanctions statutes, Executive orders and 

regulations. This interim final rule 

supersedes the Economic Sanctions 

Enforcement Guidelines set forth in 

OFAC’s proposed rule of January 29, 

2003 1 (with the exception of the 

proposed Appendix to the Cuban Assets 

Control Regulations, 31 CFR Part 515, 

set forth therein) and the Economic 

Sanctions Enforcement Procedures for 

Banking Institutions set forth in OFAC’s 

interim final rule of January 12, 2006.2

These Enforcement Guidelines are 

published as an appendix to the 

Reporting, Procedures and Penalties 

Regulations, 31 CFR Part 501. 

DATES: The interim final rule is effective 

September 8, 2008. Written comments 

may be submitted on or before 

November 7, 2008. 

ADDRESSES: You may submit comments 

by any of the following methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. 

Follow the instructions for submitting 

comments. 

Fax: Attn: Request for Comments 

(Enforcement Guidelines) (202) 622–

1657. 

Mail: Attn: Request for Comments 

(Enforcement Guidelines), Office of 

Foreign Assets Control, Department of 

the Treasury, 1500 Pennsylvania 

Avenue, NW., Washington, DC 20220. 

Instructions: All submissions received 

must include the agency name and the 

Federal Register Doc. number that 

appears at the end of this document. 

Comments received will be made 

available to the public via 

regulations.gov or upon request, without 

change and including any personal 

information provided. 

FOR FURTHER INFORMATION CONTACT: 

Elton Ellison, Assistant Director, Civil 

Penalties, (202) 622–6140 (not a toll-free 

call). 

SUPPLEMENTARY INFORMATION: 

Electronic Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(http://www.treas.gov/ofac) or via 

facsimile through a 24-hour fax-ondemand service, tel.: (202) 622–0077. 

Procedural Requirements 

Because this interim final rule 

imposes no obligations on any person, 

but only explains OFAC’s enforcement 

policy and procedures based on existing 

substantive rules, prior notice and 

public comment are not required 

pursuant to 5 U.S.C. 553(b)(A). Because 

no notice of proposed rulemaking is 

required, the provisions of the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6) do not apply. This interim 

final rule is not a significant regulatory 

action for purposes of Executive Order 

12866. 

Although a prior notice of proposed 

rulemaking is not required, as discussed 

in more detail below, OFAC is soliciting 

comments on this interim final rule in 

order to consider how it might make 

improvements to these Guidelines. 

Comments must be submitted in 

writing. The addresses and deadline for 

submitting comments appear near the 

beginning of this notice. OFAC will not 

accept comments accompanied by a 

request that all or part of the submission 

be treated confidentially because of its 

business proprietary nature or for any 

other reason. All comments received by 

the deadline will be a matter of public 

record and will be made available to the 

public via regulations.gov. 

The collections of information related 

to the Reporting, Procedures and 

Penalties Regulations have been 

previously approved by the Office of 

Management and Budget (OMB) under 

control number 1505–0164. A small 

adjustment to that collection has been 

submitted to OMB in order to take into 

account the voluntary self-disclosure 

process set forth in these Guidelines. An 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a valid control number 

assigned by OMB. This collection of 


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3Pub. Law 110–96, 121 Stat. 1011 (October 16, 

2007). 

4Pub. Law 95–223, 91 Stat. 1626 (December 28, 

1977). 

information is described in subpart F of 

Part I, subpart G of part III and subpart 

B of part V of these Guidelines, which 

will constitute the new Appendix to 

part 501. The referenced subparts 

explain that the voluntary selfdisclosure of an apparent violation to 

OFAC will be considered in 

determining the appropriate agency 

response to the apparent violation and, 

in cases where a civil monetary penalty 

is deemed appropriate, the base penalty 

amount and the proposed penalty 

amount. As set forth in subpart B of part 

V of the Guidelines, an apparent 

violation involving a voluntary selfdisclosure will result in a base penalty 

amount at least 50 percent less than the 

base penalty amount in similar cases 

that do not involve a voluntary selfdisclosure. This provides an incentive 

for persons who have or may have 

violated economic sanctions laws to 

come forward and provide OFAC 

information that it can use to better 

enforce its economic sanctions 

programs. The submitters who will 

likely seek to avail themselves of the 

benefits of voluntary self-disclosure are 

financial institutions, businesses, other 

entities, and individuals who find that 

they have or may have violated a 

sanctions prohibition and wish to 

disclose their actual or potential 

violation. 

The estimated total annual reporting 

and/or recordkeeping burden: 1,250 

hours. The estimated annual burden per 

respondent/record keeper: 10 hours. 

Estimated number of respondents and/ 

or record keepers: 125. Estimated 

annual frequency of responses: Once or 

less, given that OFAC expects that 

persons who voluntarily self disclose 

their violations will take better care to 

avoid future violations. Comments are 

invited on: (a) Whether this collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information has practical utility; (b) the 

accuracy of the agency’s estimate of the 

burden of the collection of information; 

(c) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; (d) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology; and (e) estimates of capital 

or start-up costs and costs of operation, 

maintenance, and purchase of services 

to provide information. Comments 

concerning the above information, the 

accuracy of the estimated average 

annual burden, and suggestions for 

reducing this burden should be directed 

to OMB, Paperwork Reduction Project, 

control number 1505–0164, 

Washington, DC 20503, with a copy to 

the Office of Foreign Assets Control, 

Department of the Treasury, 1500 

Pennsylvania Ave., NW., Washington, 

DC 20220. Any such comments should 

be submitted no later than November 7, 

2008. Comments on aspects of this rule 

other than those involving collections of 

information subject to the Paperwork 

Reduction Act should not be sent to 

OMB. 

Background 

The primary mission of OFAC is to 

administer and enforce economic 

sanctions against targeted foreign 

countries and regimes, terrorists and 

terrorist organizations, weapons of mass 

destruction proliferators, narcotic 

traffickers, and others in furtherance of 

U.S. national security, foreign policy, 

and economic objectives. OFAC acts 

under Presidential national emergency 

powers, as well as specific legislation, to 

prohibit transactions and block (or 

‘‘freeze’’) assets subject to U.S. 

jurisdiction. Economic sanctions are 

designed to deprive the target of the use 

of its assets and deny the target access 

to the U.S. financial system and the 

benefits of trade, transactions, and 

services involving U.S. markets, 

businesses, and individuals. These same 

authorities have also been used to 

protect assets subject to U.S. jurisdiction 

of countries subject to foreign 

occupation and to further important 

U.S. nonproliferation goals. 

OFAC administers and enforces 

economic sanctions programs pursuant 

to Presidential and statutory authorities. 

OFAC is responsible for civil 

investigation and enforcement of 

economic sanctions violations 

committed by Subject Persons, as 

defined in the Guidelines. Where 

appropriate, OFAC may coordinate its 

investigative and enforcement activities 

with federal, state, local and/or foreign 

regulators and/or law enforcement 

agencies. Active enforcement of these 

programs is a crucial element in 

preserving and advancing the national 

security, foreign policy and economic 

objectives that underlie these initiatives. 

Penalties, both civil and criminal, serve 

as a deterrent to conduct that 

undermines or prevents these sanctions 

programs from achieving their various 

goals. 

On January 29, 2003, OFAC 

published, as a proposed rule, generally 

applicable Economic Sanctions 

Enforcement Guidelines, as well as a 

proposed Appendix to the Cuban Assets 

Control Regulations (CACR) providing a 

schedule of proposed civil monetary 

penalties for certain violations of the 

CACR (Cuba Penalty Schedule). Though 

this proposed rule was not finalized, 

OFAC has used the generally applicable 

guidelines set forth therein as a general 

framework for its enforcement actions 

and the Cuban Penalty Schedule as a 

framework for the imposition of civil 

monetary penalties for the violations of 

the CACR described therein. On January 

12, 2006, OFAC published, as an 

interim final rule, Economic Sanctions 

Enforcement Procedures for Banking 

Institutions which withdrew the January 

29, 2003 proposed rule to the extent that 

it applied to banking institutions, as 

defined in the interim final rule. 

On October 16, 2007, the President 

signed into law the International 

Emergency Economic Powers 

Enhancement Act (Enhancement Act),3

substantially increasing the maximum 

penalties for violations of the 

International Emergency Economic 

Powers Act (IEEPA),4 a principal 

statutory authority for most OFAC 

sanctions programs. The increased 

maximum penalty amounts set forth in 

the Enhancement Act, as well as its 

application to pending or commenced 

cases involving apparent violations of 

IEEPA, prompted the development of 

these new Guidelines for determining 

an appropriate enforcement response to 

apparent violations of sanctions 

programs enforced by OFAC (as defined 

in the Guidelines), and, in cases 

involving civil monetary penalties, for 

determining the amount of any civil 

monetary penalty. The Guidelines set 

forth in this interim final rule supersede 

the enforcement procedures for banking 

institutions set forth in the interim final 

rule of January 12, 2006, which is 

hereby withdrawn, as well as the 

proposed guidelines set forth in the 

proposed rule of January 29, 2003, 

which is also hereby withdrawn, with 

the exception of the Cuba Penalty 

Schedule. (Those withdrawn 

enforcement procedures and guidelines 

continue to apply to the categories of 

cases set forth in OFAC’s November 27, 

2007 Civil Penalties—Interim Policy.) 

The Guidelines set forth herein are 

applicable to all persons subject to any 

of the sanctions programs administered 

by OFAC. As discussed in greater detail 

below, OFAC requests comments on this 

interim final rule. The Guidelines set 

forth in this interim final rule are not 

applicable to penalty or enforcement 

actions by other agencies based on the 

same underlying course of conduct, the 


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disposition of goods seized by Customs 

and Border Protection, or the release of 

blocked property by OFAC. 

The Guidelines set forth in this 

interim final rule are applicable to all 

enforcement matters currently pending 

before OFAC or that will come before 

OFAC in the future, whether such 

matters fall under IEEPA or any of the 

other statutes pursuant to which OFAC 

is authorized to enforce sanctions 

(including, but not limited to, the 

Trading With the Enemy Act), with the 

exception of (i) those categories of cases 

set forth in OFAC’s November 27, 2007 

Civil Penalties—Interim Policy and (ii) 

those matters addressed in the Cuba 

Penalty Schedule or the Service 

Provider Program Circular periodically 

issued by OFAC pursuant to the CACR. 

The Guidelines reflect the factors that 

OFAC will consider in determining the 

appropriate enforcement response to an 

apparent violation of an OFAC 

sanctions program, and those factors are 

consistent across programs. The civil 

penalty provisions of the Guidelines 

take into account the maximum 

penalties available under the various 

statutes pursuant to which OFAC is 

authorized to enforce its sanctions 

programs. 

The Guidelines reflect several changes 

from the 2003 proposed rule and the 

2006 interim final rule. First, rather than 

identifying ‘‘aggravating’’ and 

‘‘mitigating’’ factors, the Guidelines set 

forth General Factors that OFAC will 

consider in determining an appropriate 

enforcement response to an apparent 

violation and, if a civil monetary 

penalty is warranted, in establishing the 

amount of that penalty. The General 

Factors reflect the considerations that 

OFAC believes are most critical to a 

determination of appropriate agency 

action. The move away from 

‘‘aggravating’’ and ‘‘mitigating’’ factors 

was motivated in part by the realization 

that in many cases, a particular factor 

could be considered either aggravating 

or mitigating (e.g., remedial action was 

considered a mitigating factor in the 

2003 proposed rule, while the absence 

of remedial action was considered an 

aggravating factor). Rather than list such 

factors as both aggravating and 

mitigating factors, OFAC believes it is 

better practice to identify the General 

Factors it will consider as part of a 

holistic consideration of the facts and 

circumstances of a particular case. 

Second, the Guidelines provide for 

the issuance of either cautionary letters 

or findings of violation under certain 

circumstances, rather than the 

cautionary letters and warning letters 

provided for in the 2003 proposed rule 

and the evaluative letters provided for 

in the 2006 interim final rule. 

Cautionary letters reflect OFAC’s 

enforcement response to an apparent 

violation when OFAC determines either 

that there is insufficient evidence to 

conclude that a violation has occurred 

or that a finding of violation is not 

warranted under the circumstances. A 

cautionary letter does not constitute a 

final agency determination that a 

violation has or has not occurred, but 

serves to place the Subject Person on 

notice that any such similar conduct in 

the future may result in a finding of 

violation or the imposition of a civil 

monetary penalty. Findings of violation 

are reserved for cases in which OFAC 

determines that a violation has occurred 

and considers it important to document 

the occurrence of a violation, but 

nevertheless concludes that the 

imposition of a civil monetary penalty 

is not the most appropriate enforcement 

response. Because a finding of violation 

constitutes a final agency determination 

that a violation has occurred, OFAC will 

afford the Subject Person an opportunity 

to respond to OFAC’s determination. 

OFAC will give careful consideration to 

the appropriateness of issuing a 

cautionary letter or finding of violation 

in lieu of the imposition of a civil 

monetary penalty. 

Third, in recognition of OFAC’s 

position that the enhanced maximum 

civil penalties authorized by the 

Enhancement Act should be reserved for 

the most serious cases, the Guidelines 

distinguish between egregious and nonegregious civil monetary penalty cases. 

Egregious cases are defined as those 

representing the most serious sanctions 

violations, based on an analysis of all 

applicable General Factors, with 

substantial weight given to 

considerations of willfulness or 

recklessness, awareness of the conduct 

giving rise to an apparent violation, 

harm to sanctions program objectives, 

and the individual characteristics of the 

Subject Person. As described below, the 

Guidelines generally provide for 

significantly higher civil penalties for 

egregious cases. OFAC anticipates that 

the majority of enforcement cases will 

fall in the non-egregious category. 

Fourth, in those cases in which the 

imposition of a civil monetary penalty 

is deemed appropriate, the Guidelines 

provide a new process for determining 

the penalty amount. This process 

involves first determining a base penalty 

amount. This base penalty amount is 

based on two primary considerations: (i) 

Whether the conduct, activity, or 

transaction giving rise to a violation is 

egregious or non-egregious and (ii) 

whether the case involves a voluntary 

self-disclosure by the Subject Person. As 

discussed above, egregious cases are 

generally subject to significantly higher 

penalties, a result reflected in the base 

penalty amount for such cases. In 

keeping with the previous enforcement 

guidelines and in recognition of the 

importance of voluntary self-disclosures 

to OFAC, the existence (or lack) of a 

voluntary self-disclosure is a major 

factor in establishing the penalty 

amount. The base penalty amount for a 

case involving a voluntary selfdisclosure reflects a 50 percent or more 

reduction from the base penalty amount 

that would otherwise be applicable. As 

set forth in greater detail in the 

Guidelines themselves, once a base 

penalty amount is calculated based on 

the transaction value and egregiousness/ 

voluntary self-disclosure factors, the 

amount may be adjusted upward or 

downward based on the other General 

Factors set forth in the Guidelines. The 

resulting amount reflects OFAC’s 

proposed civil monetary penalty. 

Pre-penalty notices issued pursuant to 

these Guidelines will set forth the actual 

civil monetary penalty that OFAC 

proposes to impose. Thus, the prepenalty notice will provide a Subject 

Person with notice of the actual penalty 

that the agency deems appropriate 

under the circumstances, rather than 

merely identifying the maximum 

possible penalty. Subject Persons will 

be afforded an opportunity to respond to 

a pre-penalty notice with arguments 

and/or evidence respecting the amount 

of the proposed penalty, which OFAC 

will consider prior to issuing a final 

penalty notice. By adopting this 

approach, OFAC intends to bring greater 

transparency to the civil penalty process 

and to provide more useful notice to 

Subject Persons that may be subject to 

a civil monetary penalty. 

The Guidelines also address the 

process for settling allegations of 

violations. 

Although this interim final rule is 

effective immediately, OFAC is 

soliciting comments for a 60-day period 

with a view to improving the 

Guidelines. Comments are requested on 

all aspects of the Guidelines, but are 

particularly sought with respect to the 

following: 

• Are the General Factors Affecting 

Administrative Action the appropriate 

factors the agency should consider in 

determining the type of enforcement 

response to an apparent violation, and, 

if a civil monetary penalty is warranted, 

the amount of that penalty? Are there 

other factors that should be identified in 

the Guidelines? Are there factors that 

should be eliminated? Are there factors 

that should be defined with greater 

specificity? 


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• Is the definition of an egregious 

case appropriate? 

• Are the proposed base penalty 

amounts appropriate for the types of 

cases to which they are applicable? 

• Does the new penalty process, 

whereby the pre-penalty notice sets 

forth the penalty that OFAC proposes to 

impose, constitute an improvement on 

current practice? Can the process be 

improved in other ways? 

List of Subjects in 31 CFR Part 501 

Administrative practice and 

procedure, Banks, Banking, Insurance, 

Money service business, Penalties, 

Reporting and recordkeeping 

requirements, Securities. 

■ For the reasons set forth in the 

preamble, 31 CFR Part 501 is amended 

as follows: 

PART 501—REPORTING, 

PROCEDURES AND PENALTIES 

REGULATIONS 

■ 1. The authority citation for Part 501 

is revised to read as follows: 

Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 

2339B; 19 U.S.C. 3901–3913; 21 U.S.C. 1901–

1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), 

6009, 6032, 7205; 28 U.S.C. 2461 note; 31 

U.S.C. 321(b); 50 U.S.C. 1701–1706; 50 U.S.C. 

App. 1–44. 

■ 2. Part 501 is amended by revising 

Appendix A to Part 501 to read as 

follows: 

Appendix A to Part 501—Economic 

Sanctions Enforcement Guidelines 

Note: This appendix provides a general 

framework for the enforcement of all 

economic sanctions programs administered 

by the Office of Foreign Assets Control 

(OFAC), with the exception of those 

violations set forth in the proposed Appendix 

to the Cuban Assets Control Regulations 

(CACR), 31 CFR Part 515 (see 68 FR 4422, 

4429 (January 29, 2003)) or in the Service 

Provider Program Circular periodically 

issued by OFAC pursuant to the CACR. 

I. Definitions 

A. Apparent violation means conduct that 

constitutes an actual or possible violation of 

U.S. economic sanctions laws, including the 

International Emergency Economic Powers 

Act (IEEPA), the Trading With the Enemy Act 

(TWEA), the Foreign Narcotics Kingpin 

Designation Act, and other statutes 

administered or enforced by OFAC, as well 

as Executive orders, regulations, orders, 

directives, or licenses issued pursuant 

thereto. 

B. Applicable schedule amount means: 

i. $1,000 with respect to a transaction 

valued at less than $1,000; 

ii. $10,000 with respect to a transaction 

valued at $1,000 or more but less than 

$10,000; 

iii. $25,000 with respect to a transaction 

valued at $10,000 or more but less than 

$25,000; 

iv. $50,000 with respect to a transaction 

valued at $25,000 or more but less than 

$50,000; 

v. $100,000 with respect to a transaction 

valued at $50,000 or more but less than 

$100,000; 

vi. $170,000 with respect to a transaction 

valued at $100,000 or more but less than 

$170,000; 

vii. $250,000 with respect to a transaction 

valued at $170,000 or more, except that 

where the applicable schedule amount as 

defined above exceeds the statutory 

maximum civil penalty amount applicable to 

an apparent violation, the applicable 

schedule amount shall equal such statutory 

maximum civil penalty amount. 

C. OFAC means the Department of the 

Treasury’s Office of Foreign Assets Control. 

D. Penalty is the final civil penalty amount 

imposed in a Penalty Notice. 

E. Proposed penalty is the civil penalty 

amount set forth in a Pre-Penalty Notice. 

F. Regulator means any federal, state, local 

or foreign official or agency that has authority 

to license or examine an entity for 

compliance with federal, state, or foreign 

law. 

G. Subject Person means an individual or 

entity subject to any of the sanctions 

programs administered or enforced by OFAC. 

H. Transaction value means the dollar 

value of a subject transaction. In export and 

import cases, the transaction value generally 

will be the domestic value in the United 

States of the goods, technology, or services 

sought to be exported or imported into the 

United States, as demonstrated by 

commercial invoices, bills of lading, signed 

Customs declarations, or similar documents. 

In cases involving seizures by U.S. Customs 

and Border Protection (CBP), the transaction 

value generally will be the domestic value as 

determined by CBP. If the apparent violation 

at issue is a prohibited dealing in blocked 

property by a Subject Person, the transaction 

value generally will be the dollar value of the 

underlying transaction involved, such as the 

value of the property dealt in or the amount 

of the funds transfer that a financial 

institution failed to block or reject. Where the 

transaction value is not otherwise 

ascertainable, OFAC may consider the market 

value of the goods or services that were the 

subject of the transaction, the economic 

benefit conferred on the sanctioned party, 

and/or the economic benefit derived by the 

Subject Person from the transaction in 

determining transaction value. For purposes 

of these Guidelines, ‘‘transaction value’’ will 

not necessarily have the same meaning, nor 

be applied in the same manner, as that term 

is used for import valuation purposes at 19 

CFR 152.103. 

I. Voluntary self-disclosure means selfinitiated notification to OFAC of an apparent 

violation by a Subject Person that has 

committed, or otherwise participated in, an 

apparent violation of a statute, Executive 

order, or regulation administered or enforced 

by OFAC, prior to the time that OFAC, or any 

other federal, state or local government 

agency or official, discovers the apparent 

violation or another substantially similar 

apparent violation. For these purposes, 

‘‘substantially similar apparent violation’’

means an apparent violation that is part of a 

series of similar apparent violations or is 

related to the same pattern or practice of 

conduct. Notification to OFAC of an apparent 

violation is not a voluntary self-disclosure if: 

a third party is required to notify OFAC of 

the apparent violation or a substantially 

similar apparent violation because a 

transaction was blocked or rejected by that 

third party (regardless of whether or when 

OFAC actually receives such notice from the 

third party and regardless of whether the 

Subject Person was aware of the third party’s 

disclosure); the disclosure includes false or 

misleading information; the disclosure (when 

considered along with supplemental 

information provided by the Subject Person) 

is materially incomplete; the disclosure is not 

self-initiated (including when the disclosure 

results from a suggestion or order of a federal 

or state agency or official); or, when the 

Subject Person is an entity, the disclosure is 

made by an individual in a Subject Person 

entity without the authorization of the 

entity’s senior management. Responding to 

an administrative subpoena or other inquiry 

from, or filing a license application with, 

OFAC is not a voluntary self-disclosure. In 

addition to notification, a voluntary selfdisclosure must include, or be followed 

within a reasonable period of time by, a 

report of sufficient detail to afford a complete 

understanding of an apparent violation’s 

circumstances, and should also be followed 

by responsiveness to any follow-up inquiries 

by OFAC. (As discussed further below, a 

Subject Person’s level of cooperation with 

OFAC is an important factor in determining 

the appropriate enforcement response to an 

apparent violation even in the absence of a 

voluntary self-disclosure as defined herein; 

disclosure by a Subject Person generally will 

result in mitigation insofar as it represents 

cooperation with OFAC’s investigation.) 

II. Types of Responses to Apparent 

Violations 

Depending on the facts and circumstances 

of a particular case, an OFAC investigation 

may lead to one or more of the following 

actions: 

A. No Action. If OFAC determines that 

there is insufficient evidence to conclude 

that a violation has occurred and/or, based 

on an analysis of the General Factors 

outlined in Section III of these Guidelines, 

concludes that the conduct or activity does 

not rise to a level warranting an 

administrative response, then no action will 

be taken. In those cases in which OFAC is 

aware that the Subject Person has knowledge 

of OFAC’s investigation, OFAC generally will 

issue a letter to the Subject Person indicating 

that the investigation is being closed with no 

administrative action being taken. A noaction determination represents a final 

determination as to the apparent violation, 

unless OFAC later learns of additional 

related violations or other relevant facts. 

B. Request Additional Information. If 

OFAC determines that additional information 

regarding the apparent violation is needed, it 

may request further information from the 


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Subject Person or third parties, including 

through an administrative subpoena issued 

pursuant to 31 CFR § 501.602. In the case of 

an institution subject to regulation where 

OFAC has entered into a Memorandum of 

Understanding (MOU) with the Subject 

Person’s regulator, OFAC will follow the 

procedures set forth in such MOU regarding 

consultation with the regulator. Even in the 

absence of an MOU, OFAC may seek relevant 

information about a regulated institution 

and/or the conduct or activity constituting 

the apparent violation from the institution’s 

federal, state, or foreign regulator. Upon 

receipt of information determined to be 

sufficient to assess the apparent violation, 

OFAC will decide, based on an analysis of 

the General Factors outlined in Section III of 

these Guidelines, whether to pursue further 

enforcement action or whether some other 

response to the apparent violation is 

appropriate. 

C. Cautionary Letter: If OFAC determines 

that there is insufficient evidence to 

conclude that a violation has occurred or that 

a finding of violation is not warranted under 

the circumstances, but believes that the 

underlying conduct could lead to a violation 

in other circumstances and/or that a Subject 

Person does not appear to be exercising due 

diligence in assuring compliance with the 

statutes, Executive orders, and regulations 

that OFAC enforces, OFAC may issue a 

cautionary letter that conveys its concerns 

about the underlying conduct and/or the 

Subject Person’s OFAC compliance policies, 

practices and/or procedures. A cautionary 

letter represents a final enforcement response 

to the apparent violation, unless OFAC later 

learns of additional related violations or 

other relevant facts, but does not constitute 

a final agency determination as to whether a 

violation has occurred. 

D. Finding of Violation: If OFAC 

determines that a violation has occurred and 

considers it important to document the 

occurrence of a violation and, based on an 

analysis of the General Factors outlined in 

Section III of these Guidelines, concludes 

that the Subject Person’s conduct warrants an 

administrative response but that a civil 

monetary penalty is not the most appropriate 

response, OFAC may issue a finding of 

violation that identifies the violation, 

conveys OFAC’s concerns about the violation 

and/or the Subject Person’s OFAC 

compliance policies, practices and/or 

procedures, and/or identifies the need for 

further compliance steps to be taken. A 

finding of violation represents a final 

enforcement response to the violation, unless 

OFAC later learns of additional related 

violations or other relevant facts, and 

constitutes a final agency determination that 

a violation has occurred. A finding of 

violation will afford the Subject Person an 

opportunity to respond to OFAC’s 

determination that a violation has occurred. 

E. Civil Monetary Penalty. If OFAC 

determines that a violation has occurred and, 

based on an analysis of the General Factors 

outlined in Section III of these Guidelines, 

concludes that the Subject Person’s conduct 

warrants the imposition of a monetary 

penalty, OFAC may impose a civil monetary 

penalty. Civil monetary penalty amounts will 

be determined as discussed in Section V of 

these Guidelines. The imposition of a civil 

monetary penalty constitutes a final agency 

determination that a violation has occurred 

and represents a final civil enforcement 

response to the violation. 

F. Criminal Referral. In appropriate 

circumstances, OFAC may refer the matter to 

appropriate law enforcement agencies for 

criminal investigation and/or prosecution. 

Apparent sanctions violations that OFAC has 

referred for criminal investigation and/or 

prosecution also may be subject to OFAC 

civil penalty or other administrative action. 

G. Other Administrative Actions. In 

addition to or in lieu of other administrative 

actions, OFAC may also take the following 

administrative actions in response to an 

apparent violation: 

1. License Denial, Suspension, 

Modification, or Revocation. OFAC 

authorizations to engage in a transaction 

(including the release of blocked funds) 

pursuant to a general or specific license may 

be withheld, denied, suspended, modified, or 

revoked in response to an apparent violation. 

2. Cease and Desist Order. OFAC may 

order the Subject Person to cease and desist 

from conduct or activities that are prohibited 

by any of the sanctions programs enforced by 

OFAC when OFAC has reason to believe that 

a Subject Person has engaged in such 

conduct or activities and/or that such 

conduct or activities are ongoing or may 

recur. 

III. General Factors Affecting Administrative 

Action 

The type of enforcement action undertaken 

by OFAC will depend on the nature of the 

apparent violation and the harm caused to 

the relevant sanctions program and its 

objectives. As a general matter, OFAC will 

consider some or all of the following General 

Factors in determining the appropriate 

administrative action in response to an 

apparent violation of U.S. sanctions by a 

Subject Person, and, where a civil monetary 

penalty is imposed, in determining the 

appropriate amount of any such penalty: 

A. Willful or Reckless Violation of Law: a 

Subject Person’s willfulness or recklessness 

in violating, attempting to violate, conspiring 

to violate, or causing a violation of the law. 

Generally, to the extent the conduct, activity 

or transaction at issue is the result of willful 

misconduct or a deliberate intent to violate, 

attempt to violate, conspire to violate, or 

cause a violation of the law, the OFAC 

enforcement response will be stronger. 

Among the factors OFAC may consider in 

evaluating willfulness or recklessness are: 

1. Willfulness. Was the conduct at issue the 

result of a decision to take action with the 

knowledge that such action would constitute 

a violation of U.S. law? Did the Subject 

Person know that the underlying conduct 

constituted, or likely constituted, a violation 

of U.S. law at the time of the conduct? 

2. Recklessness. Did the Subject Person 

demonstrate reckless disregard for U.S. 

sanctions requirements or otherwise fail to 

exercise a minimal degree of caution or care 

in avoiding conduct, activities or transactions 

that led to the apparent violation? Were there 

warning signs that should have alerted the 

Subject Person that an action or failure to act 

would lead to an apparent violation? 

3. Concealment. Was there an effort by the 

Subject Person to hide or purposely obfuscate 

its conduct, activities or transactions in order 

to mislead OFAC, federal, state or foreign 

regulators, or other parties involved in the 

transaction/conduct about an apparent 

violation? 

4. Pattern of Misconduct. Was the apparent 

violation the result of a pattern or practice of 

conduct or was it relatively isolated and 

atypical in nature? 

5. Prior Notice. Was the Subject Person on 

notice, or should it reasonably have been on 

notice, that the conduct at issue, or similar 

conduct, constituted a violation of U.S. law? 

6. Management Involvement. In cases of 

entities, at what level within the organization 

did the willful or reckless misconduct occur? 

Were supervisory or managerial level staff 

aware, or should they reasonably have been 

aware, of the willful or reckless misconduct? 

B. Awareness of Conduct at Issue: The 

Subject Person’s awareness of the conduct, 

activity or transaction giving rise to the 

apparent violation. Generally, the greater a 

Subject Person’s actual knowledge of, or 

reason to know about, the conduct, activity, 

or transaction constituting an apparent 

violation, the stronger the OFAC enforcement 

response will be. In the case of a corporation, 

awareness will focus on supervisory or 

managerial level staff in the business unit at 

issue, as well as other senior officers and 

managers. Among the factors OFAC may 

consider in evaluating the Subject Person’s 

awareness of the conduct at issue are: 

1. Actual Knowledge. Did the Subject 

Person have actual knowledge that the 

conduct, activity, or transaction giving rise to 

an apparent violation took place? Was the 

conduct, activity, or transaction part of a 

business process, structure or arrangement 

that was designed or implemented with the 

intent to prevent or shield the Subject Person 

from having such actual knowledge, or was 

the conduct, activity, or transaction part of a 

business process, structure or arrangement 

implemented for other legitimate reasons that 

made it difficult or impossible for the Subject 

Person to have actual knowledge? 

2. Reason to Know. If the Subject Person 

did not have actual knowledge that the 

conduct, activity, or transaction took place, 

did the Subject Person have reason to know, 

or should the Subject Person reasonably have 

known, based on all readily available 

information and with the exercise of 

reasonable due diligence, that the conduct, 

activity, or transaction would or might take 

place? 

3. Management Involvement. In the case of 

an entity, was the conduct, activity or 

transaction undertaken with the explicit or 

implicit knowledge of senior management, or 

was the conduct, activity, or transaction 

undertaken by personnel outside the 

knowledge of senior management? If the 

apparent violation was undertaken without 

the knowledge of senior management, was 

there oversight intended to detect and 

prevent violations, or did the lack of 

knowledge by senior management result from 

disregard for its responsibility to comply 

with applicable sanctions laws? 


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C. Harm to Sanctions Program Objectives: 

The actual or potential harm to sanctions 

program objectives caused by the conduct, 

activities, or transactions giving rise to the 

apparent violation. Among the factors OFAC 

may consider in evaluating the harm to 

sanctions program objectives are: 

1. Economic or Other Benefit to the 

Sanctioned Individual, Entity, or Country: 

The economic or other benefit conferred or 

attempted to be conferred to sanctioned 

individuals, entities, or countries as a result 

of an apparent violation, including the 

number, size, and impact of the transactions 

or incidents constituting an apparent 

violation(s), the length of time over which 

they occurred, and the nature of the 

economic or other benefit conferred. OFAC 

may also consider the causal link between 

the Subject Person’s conduct and the 

economic benefit conferred or attempted to 

be conferred. 

2. Implications for U.S. Policy: The effect 

that the circumstances of the apparent 

violation had on the integrity of the U.S. 

sanctions program and the related policy 

objectives involved. 

3. License Eligibility: Whether the conduct 

constituting the apparent violation likely 

would have been licensed by OFAC under 

existing licensing policy. 

4. Humanitarian activity: Whether the 

conduct at issue was in support of a 

humanitarian activity. 

D. Individual Characteristics: The 

particular circumstances and characteristics 

of a Subject Person. Among the factors OFAC 

may consider in evaluating individual 

characteristics are: 

1. Commercial Sophistication: The 

commercial sophistication and experience of 

the Subject Person. Is the Subject Person an 

individual or an entity? If an individual, was 

the transaction constituting the apparent 

violation conducted for personal or business 

reasons? 

2. Size of Operations and Financial 

Condition: The size of a Subject Person’s 

business operations and overall financial 

condition may be considered, where such 

information is available and relevant. 

Qualification of the Subject Person as a small 

business or organization for the purposes of 

the Small Business Regulatory Enforcement 

Fairness Act, as determined by reference to 

the applicable regulations of the Small 

Business Administration, may also be 

considered. 

3. Volume of Transactions: The total 

volume of transactions undertaken by the 

Subject Person on an annual basis, with 

attention given to the apparent violations as 

compared with the total volume. 

4. Sanctions Violation History: The Subject 

Person’s history of sanctions violations, 

including OFAC’s issuance of prior findings 

of violations or cautionary, warning or 

evaluative letters, or other administrative 

actions. 

E. Compliance Program: The existence and 

nature of a Subject Person’s OFAC 

compliance program at the time of the 

apparent violation, where relevant. In the 

case of an institution subject to regulation 

where OFAC has entered into a 

Memorandum of Understanding (MOU) with 

the Subject Person’s regulator, OFAC will 

follow the procedures set forth in such MOU 

regarding consultation with the regulator 

with regard to the quality and effectiveness 

of the Subject Person’s compliance program. 

Even in the absence of an MOU, OFAC may 

take into consideration the views of federal, 

state, or foreign regulators, where relevant. 

F. Remedial Response: The Subject 

Person’s corrective action taken in response 

to the apparent violation. Among the factors 

OFAC may consider in evaluating the 

remedial response are: 

1. The steps taken by the Subject Person 

upon learning of the apparent violation. Did 

the Subject Person immediately stop the 

conduct at issue? 

2. In the case of an entity, the processes 

followed to resolve issues related to the 

apparent violation. Did the Subject Person 

discover necessary information to ascertain 

the causes and extent of the apparent 

violation, fully and expeditiously? Where 

applicable, were the Audit Committee and 

the Board of Directors fully informed? If so, 

when? 

3. In the case of an entity, whether the 

Subject Person adopted new and more 

effective internal controls and procedures to 

prevent a recurrence of the apparent 

violation. If the Subject Person did not have 

an OFAC compliance program in place at the 

time of the apparent violation, did it 

implement one upon discovery or 

notification of the violations? If it did have 

an OFAC compliance program, did it take 

appropriate steps to enhance the program to 

prevent the recurrence of similar violations? 

Did the entity provide the individual(s) 

responsible for the apparent violation with 

additional training, and/or take other 

appropriate action, to ensure that similar 

violations do not occur in the future? 

4. Where applicable, whether the Subject 

Person undertook a thorough review to 

identify other possible violations. 

G. Cooperation with OFAC: The nature and 

extent of the Subject Person’s cooperation 

with OFAC. Among the factors OFAC may 

consider in evaluating cooperation with 

OFAC are: 

1. Did the Subject Person voluntarily selfdisclose the apparent violation to OFAC? 

2. Did the Subject Person provide OFAC 

with all relevant information regarding an 

apparent violation (whether or not 

voluntarily self-disclosed)? 

3. Did the Subject Person research and 

disclose to OFAC relevant information 

regarding any other apparent violations 

caused by the same course of conduct? 

4. Was information provided voluntarily or 

in response to an administrative subpoena? 

5. Did the Subject Person cooperate with, 

and promptly respond to, all requests for 

information? 

6. Did the Subject Person agree to a statute 

of limitations waiver or tolling agreement, if 

requested by OFAC (particularly in situations 

where the apparent violations were not 

immediately notified to or discovered by 

OFAC)? 

H. Timing of apparent violation in relation 

to imposition of sanctions: The timing of the 

apparent violation in relation to the adoption 

of the applicable prohibitions, particularly if 

the apparent violation took place soon after 

relevant changes in the sanctions program 

regulations or the addition of a new name to 

OFAC’s List of Specially Designated 

Nationals and Blocked Persons (SDN List). 

I. Other enforcement action: Other 

enforcement actions taken by federal, state, 

or local agencies against the Subject Person 

for the apparent violation or similar apparent 

violations, including whether the settlement 

of alleged violations of OFAC regulations is 

part of a comprehensive settlement with 

other federal, state, or local agencies. 

J. Future Compliance/Deterrence Effect: 

The impact administrative action may have 

on promoting future compliance with U.S. 

economic sanctions by the Subject Person 

and similar Subject Persons, particularly 

those in the same industry sector. 

K. Other relevant factors on a case-by-case 

basis: Such other factors that OFAC deems 

relevant on a case-by-case basis in 

determining the appropriate enforcement 

response and/or the amount of any civil 

monetary penalty. OFAC will consider the 

totality of the circumstances to ensure that its 

enforcement response is proportionate to the 

nature of the violation. 

IV. Civil Penalties for Failure to Furnish 

Information or Keep Records 

Except in the instance of authorized 

service providers under the Cuban Assets 

Control Regulations, for whom enforcement 

guidelines appear in the Service Provider 

Program Circular periodically issued by 

OFAC, as a general matter the following civil 

penalty amounts shall apply to a Subject 

Person’s failure to furnish information or 

maintain records: 

A. The failure to respond to a requirement 

to furnish information pursuant to 31 CFR 

501.602, or failure to furnish the requested 

information, may result in a penalty in an 

amount up to $20,000, irrespective of 

whether any other violation is alleged. Where 

OFAC has reason to believe that the apparent 

violation(s) that is the subject of the request 

to furnish information involves a 

transaction(s) valued at greater than 

$500,000, a failure to respond to a request to 

furnish information or failure to furnish the 

requested information may result in a penalty 

in an amount up to $50,000, irrespective of 

whether any other violation is alleged. A 

failure to respond to a requirement to furnish 

information or a failure to furnish the 

requested information shall be considered a 

continuing violation, and the penalties 

described above may be imposed each month 

that a party has continued to fail to respond 

or to furnish the requested information. 

OFAC may also seek to have a requirement 

to furnish information judicially enforced. 

Imposition of a civil monetary penalty for 

failure to respond to a requirement to furnish 

information or a failure to furnish the 

requested information does not preclude 

OFAC from seeking such judicial 

enforcement. 

B. The late filing of a required report, 

whether set forth in regulations or in a 

specific license, may result in a civil 

monetary penalty in an amount up to $2,500, 

if filed within the first 30 days after the 

report is due, and a penalty in an amount up 


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to $5,000 if filed more than 30 days after the 

report is due. If the report relates to blocked 

assets, the penalty may include an additional 

$1,000 for every 30 days that the report is 

overdue, up to five years. 

C. The first failure to maintain records in 

conformance with the requirements of 

OFAC’s regulations or of a specific license 

may result in a penalty in an amount up to 

$5,000. Each additional violation in this 

regard may result in a penalty in an amount 

up to $10,000. 

V. Civil Penalties 

OFAC will review the facts and 

circumstances surrounding an apparent 

violation and apply the General Factors for 

Taking Administrative Action in Section III 

above in determining whether to initiate a 

civil penalty proceeding and in determining 

the amount of any civil monetary penalty. 

OFAC will give careful consideration to the 

appropriateness of issuing a cautionary letter 

or finding of violation in lieu of the 

imposition of a civil monetary penalty. 

A. Civil Penalty Process 

1. Pre-Penalty Notice. If OFAC has reason 

to believe that a violation of U.S. sanctions 

has occurred and that a civil monetary 

penalty is warranted, it will issue a PrePenalty Notice in accordance with the 

procedures set forth in the particular 

regulations governing the conduct, activity, 

or transactions giving rise to the apparent 

violation. The amount of the proposed 

penalty set forth in the Pre-Penalty Notice 

will reflect OFAC’s preliminary assessment 

of the appropriate penalty amount, based on 

information then in OFAC’s possession. The 

amount of the final penalty may change as 

OFAC learns additional relevant information. 

If, after issuance of a Pre-Penalty Notice, 

OFAC determines that a penalty in an 

amount that represents an increase of more 

than 10 percent from the proposed penalty 

set forth in the Pre-Penalty Notice is 

appropriate, or if OFAC intends to allege 

additional violations, it will issue a revised 

Pre-Penalty Notice setting forth the new 

proposed penalty amount and/or alleged 

violations. 

a. In general, the Pre-Penalty Notice will 

set forth the following with respect to the 

specific violations alleged and the proposed 

penalties: 

i. Description of the alleged violations, 

including the number of violations and their 

value, for which a penalty is being proposed; 

ii. Identification of the regulatory or other 

provisions alleged to have been violated; 

iii. Identification of the General Factors 

that were most relevant to the determination 

of the proposed penalty amount, including 

the base category (defined below) according 

to which the proposed penalty amount was 

calculated; 

iv. The maximum amount of the penalty to 

which the Subject Person could be subject 

under applicable law; and 

v. The proposed penalty amount, 

determined in accordance with the 

provisions set forth in these Guidelines. 

b. The Pre-Penalty Notice will also include 

information regarding how to respond to the 

Pre-Penalty Notice including: 

i. A statement that the Subject Person may 

submit a written response to the Pre-Penalty 

Notice by a date certain addressing the 

alleged violation(s), the General Factors 

Affecting Administrative Action set forth in 

Section III of these Guidelines, and any other 

information or evidence that the Subject 

Person deems relevant to OFAC’s 

consideration. 

ii. A statement that a failure to respond to 

the Pre-Penalty Notice likely will result in 

the imposition of a civil monetary penalty in 

the amount set forth in the Pre-Penalty 

Notice. 

2. Response to Pre-Penalty Notice. A 

Subject Person may submit a written 

response to the Pre-Penalty Notice in 

accordance with the procedures set forth in 

the particular regulations governing the 

conduct, activity or transactions giving rise to 

the apparent violation. Generally, the 

response should either agree to the proposed 

penalty set forth in the Pre-Penalty Notice or 

set forth reasons why a penalty should not 

be imposed or, if imposed, why it should be 

a lesser amount than proposed, with 

particular attention paid to the General 

Factors Affecting Administrative Action set 

forth in Section III of these Guidelines. The 

response should include all documentary or 

other evidence available to the Subject 

Person that supports the arguments set forth 

in the response. OFAC will consider all 

relevant materials submitted. 

3. Penalty Notice. If OFAC receives no 

response to a Pre-Penalty Notice within the 

time prescribed in the Pre-Penalty Notice, or 

if following the receipt of a response to a PrePenalty Notice and a review of the 

information and evidence contained therein 

OFAC concludes that a violation warranting 

a civil monetary penalty has occurred, a 

Penalty Notice generally will be issued in 

accordance with the procedures set forth in 

the particular regulations governing the 

conduct, activity or transactions giving rise to 

the violation. A Penalty Notice constitutes a 

final agency finding that a violation has 

occurred. The penalty amount set forth in the 

Penalty Notice will take into account relevant 

additional information provided in response 

to a Pre-Penalty Notice. In the absence of a 

response to a Pre-Penalty Notice, the penalty 

amount set forth in the Penalty Notice will 

generally be the same as the proposed 

penalty set forth in the Pre-Penalty Notice. 

4. Referral to Financial Management 

Division. The imposition of a civil monetary 

penalty pursuant to a Penalty Notice creates 

a debt due the U.S. Government. OFAC will 

advise Treasury’s Financial Management 

Division upon the imposition of a penalty. 

The Financial Management Division may 

take follow-up action to collect the penalty 

assessed if it is not paid within the 

prescribed time period set forth in the 

Penalty Notice. In addition or instead, the 

matter may be referred to the U.S. 

Department of Justice for appropriate action 

to recover the penalty. 

5. Final Agency Action. The imposition of 

a penalty pursuant to a Penalty Notice 

constitutes final agency action with respect 

to the violation(s) for which the penalty is 

assessed. 

B. Amount of Civil Penalty 

1. Egregious case. In those cases in which 

a civil monetary penalty is deemed 

appropriate, OFAC will make a 

determination as to whether a case is deemed 

‘‘egregious’’ for purposes of the base penalty 

calculation. This determination will be based 

on an analysis of the applicable General 

Factors. In making the egregiousness 

determination, OFAC generally will give 

substantial weight to General Factors A 

(‘‘willful or reckless violation of law’’), B 

(‘‘awareness of conduct at issue’’), C (‘‘harm 

to sanctions program objectives’’) and D 

(‘‘individual characteristics’’), with particular 

emphasis on General Factors A and B. A case 

will be considered an ‘‘egregious case’’ where 

the analysis of the applicable General 

Factors, with a focus on those General 

Factors identified above, indicates that the 

case represents a particularly serious 

violation of the law calling for a strong 

enforcement response. A determination that 

a case is ‘‘egregious’’ will be made by the 

Director or Deputy Director. 

2. Pre-Penalty Notice. The penalty amount 

proposed in a Pre-Penalty Notice shall 

generally be calculated as follows, except 

that neither the base amount nor the 

proposed penalty will exceed the applicable 

statutory maximum amount: 

a. Base category calculation 

i. In a non-egregious case, if the apparent 

violation is disclosed through a voluntary 

self-disclosure by the Subject Person, the 

base amount of the proposed civil penalty in 

the Pre-Penalty Notice shall be one-half of 

the transaction value, capped at a maximum 

base amount of $125,000 per violation. 

ii. In a non-egregious case, if the apparent 

violation comes to OFAC’s attention by 

means other than a voluntary self-disclosure, 

the base amount of the proposed civil penalty 

in the Pre-Penalty Notice shall be the 

‘‘applicable schedule amount,’’ as defined 

above (capped at a maximum base amount of 

$250,000 per violation). 

iii. In an egregious case, if the apparent 

violation is disclosed through a voluntary 

self-disclosure by a Subject Person, the base 

amount of the proposed civil penalty in the 

Pre-Penalty Notice shall be one-half the 

statutory maximum penalty applicable to the 

violation. 

iv. In an egregious case, if the apparent 

violation comes to OFAC’s attention by 

means other than a voluntary self-disclosure, 

the base amount of the proposed civil 

monetary penalty in the Pre-Penalty Notice 

shall be the statutory maximum penalty 

amount applicable to the violation. 

The following matrix represents the base 

amount of the proposed civil penalty for each 

category of violation: 


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The base penalty amount will not exceed 

the applicable statutory maximum amount. 

b. Adjustment for applicable relevant 

General Factors 

The base amount of the proposed civil 

penalty may be adjusted to reflect applicable 

General Factors for Administrative Action set 

forth in Section III of these Guidelines. Each 

factor may be considered mitigating or 

aggravating, resulting in a lower or higher 

proposed penalty amount. As a general 

matter, in those cases where the following 

General Factors are present, OFAC will 

adjust the base proposed penalty amount in 

the following manner: 

i. In cases involving substantial 

cooperation with OFAC but no voluntary 

self-disclosure as defined herein, including 

cases in which an apparent violation is 

reported to OFAC by a third party but the 

Subject Person provides substantial 

additional information regarding the 

apparent violation and/or other related 

violations, the base penalty amount generally 

will be reduced between 25 and 40 percent. 

Substantial cooperation in cases involving 

voluntary self-disclosure may also be 

considered as a further mitigating factor. 

ii. In cases involving a Subject Person’s 

first violation, the base penalty amount 

generally will be reduced up to 25 percent. 

The extent of any such mitigation will be 

based, in part, on whether the Subject Person 

had previously been issued a cautionary, 

warning or evaluative letter. 

In all cases, the proposed penalty amount 

will not exceed the applicable statutory 

maximum. 

In cases involving a large number of 

apparent violations, where the transaction 

value of all apparent violations is either 

unknown or would require a 

disproportionate allocation of resources to 

determine, OFAC may estimate or extrapolate 

the transaction value of the total universe of 

apparent violations in determining the 

amount of any proposed civil monetary 

penalty. 

3. Penalty Notice. The amount of the 

proposed civil penalty in the Pre-Penalty 

Notice will be the presumptive starting point 

for calculation of the civil penalty amount in 

the Penalty Notice. OFAC may adjust the 

penalty amount in the Penalty Notice based 

on: 

a. Evidence presented by the Subject 

Person in response to the Pre-Penalty Notice, 

or otherwise received by OFAC with respect 

to the underlying violation(s); and/or 

b. Any modification resulting from further 

review and reconsideration by OFAC of the 

proposed civil monetary penalty in light of 

the General Factors for Administrative 

Action in Section III above. 

In no event will the amount of the civil 

monetary penalty in the Penalty Notice 

exceed the proposed penalty set forth in the 

Pre-Penalty Notice by more than 10 percent, 

or include additional alleged violations, 

unless a revised Pre-Penalty Notice has first 

been sent to the Subject Person as set forth 

above. In the event that OFAC determines 

upon further review that no penalty is 

appropriate, it will so inform the Subject 

Person in a no-action letter, a cautionary 

letter, or a finding of violation. 

C. Settlements 

A settlement does not constitute a final 

agency determination that a violation has 

occurred. 

1. Settlement Process. Settlement 

discussions may be initiated by OFAC, the 

Subject Person or the Subject Person’s 

authorized representative. Settlements 

generally will be negotiated in accordance 

with the principles set forth in these 

Guidelines with respect to appropriate 

penalty amounts. OFAC may condition the 

entry into or continuation of settlement 

negotiations on the execution of a tolling 

agreement with respect to the statute of 

limitations. 

2. Settlement Prior to Issuance of PrePenalty Notice. Where settlement discussions 

occur prior to the issuance of a Pre-Penalty 

Notice, the Subject Person may request in 

writing that OFAC withhold issuance of a 

Pre-Penalty Notice pending the conclusion of 

settlement discussions. OFAC will generally 

agree to such a request as long as settlement 

discussions are continuing in good faith and 

the statute of limitations is not at risk of 

expiring. 

3. Settlement Following Issuance of PrePenalty Notice. If a matter is settled after a 

Pre-Penalty Notice has been issued, but 

before a final Penalty Notice is issued, OFAC 

will not make a final determination as to 

whether a sanctions violation has occurred. 

In the event no settlement is reached, the 

period specified for written response to the 

Pre-Penalty Notice remains in effect unless 

additional time is granted by OFAC. 

4. Settlements of Multiple Apparent 

Violations. A settlement initiated for one 

apparent violation may also involve a 


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Federal Register / Vol. 73, No. 174 / Monday, September 8, 2008 / Rules and Regulations 51941 

comprehensive or global settlement of 

multiple apparent violations covered by 

other Pre-Penalty Notices, apparent 

violations for which a Pre-Penalty Notice has 

not yet been issued by OFAC, or previously 

unknown apparent violations reported to 

OFAC during the pendency of an 

investigation of an apparent violation. 

Dated: September 2, 2008. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

[FR Doc. E8–20704 Filed 9–5–08; 8:45 am] 

BILLING CODE 4811–45–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2008–0290] 

RIN 1625–AA00 

Safety Zone; Gulf of Mexico—Johns 

Pass, FL 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary safety zone on 

the waters of Johns Pass, Florida while 

construction operations are being 

conducted. This rule is necessary to 

ensure the safety of the workers and 

mariners on the navigable waters of the 

United States. No person or vessel may 

anchor, moor, or transit the Regulated 

Area without permission of the Captain 

of the Port St. Petersburg, Florida. 

DATES: This safety zone will be effective 

August 29, 2008 through August 30, 

2010. 

ADDRESSES: Comments and material 

received from the public, as well as 

documents mentioned in this preamble 

as being available in the docket, are part 

of docket USCG–2008–0290 and are 

available online at http:// 

www.regulations.gov. This material is 

also available for inspection or copying 

at two locations: The Docket 

Management Facility (M–30), U.S. 

Department of Transportation, West 

Building Ground Floor, Room W12–140, 

1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays and Coast 

Guard Sector St Petersburg Prevention 

Department, 155 Columbia Dr., Tampa, 

FL 33606 between 7:30 a.m. and 3:30 

p.m., Monday through Friday, except 

Federal holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this temporary 

rule, call BM1 Charles Voss at Coast 

Guard Sector St. Petersburg, (813) 228–

2191 Ext 8307. If you have questions on 

viewing the docket, call Renee V. 

Wright, Program Manager, Docket 

Operations, telephone 202–366–9826. 

SUPPLEMENTARY INFORMATION: 

Regulatory Information 

On May 29, 2008 we published a 

notice of proposed rulemaking (NPRM) 

entitled Safety Zone; Gulf of Mexico—

Johns Pass, FL in the Federal Register, 

73 FR 30868. We did not receive any 

letters commenting on the proposed 

rule. No public meeting was requested, 

and none was held. 

Background and Purpose 

Flatiron Construction will be 

performing construction work on the 

new Johns Pass Bridge. This work will 

involve setting girders, installing a new 

fendering system, setting the deck, 

setting overhangs, placing resteel, 

pouring the bridge deck, and wrecking 

the old bridge’s deck. These operations 

will require the closure of the navigable 

channel. The closures will only be for 

limited times, during nighttime hours, 

and scheduled to accommodate the 

local marine traffic. The nature of the 

operation and environment surrounding 

the Johns Pass Bridge presents a danger 

to the workers and mariners transiting 

the area. This proposed safety zone is 

being established to ensure the safety of 

life on the navigable waters of the 

United States. 

Discussion of Comments and Changes 

No comments were received for this 

rule and no changes were made to the 

proposed rule text. 

Regulatory Analyses 

We developed this rule after 

considering numerous statutes and 

executive orders related to rulemaking. 

Below we summarize our analyses 

based on 13 of these statutes or 

executive orders. 

Regulatory Planning and Review 

This rule is not a significant 

regulatory action under section 3(f) of 

Executive Order 12866, Regulatory 

Planning and Review, and does not 

require an assessment of potential costs 

and benefits under section 6(a)(3) of that 

Order. The Office of Management and 

Budget has not reviewed it under that 

Order. We expect the economic impact 

of this rule to be so minimal that a full 

Regulatory Evaluation is unnecessary. 

The rule will only be enforced during 

a time when vessel traffic is expected to 

be minimal. Moreover, vessels may still 

enter the safety zone with the express 

permission of the Captain of the Port St. 

Petersburg or a designated 

representative. 

Small Entities 

Under the Regulatory Flexibility Act 

(5 U.S.C. 601–612), we have considered 

whether this rule would have a 

significant economic impact on a 

substantial number of small entities. 

The term ‘‘small entities’’ comprises 

small businesses, not-for-profit 

organizations that are independently 

owned and operated and are not 

dominant in their fields, and 

governmental jurisdictions with 

populations of less than 50,000. 

The Coast Guard certifies under 5 

U.S.C. 605(b) that this rule would not 

have a significant economic impact on 

a substantial number of small entities. 

This rule may affect the following 

entities, some of which may be small 

entities: The owners or operators of 

vessels intending to transit Johns Pass, 

FL. This safety zone will not have a 

significant economic impact on a 

substantial number of small entities for 

the following reasons: This rule will be 

enforced for a limited time when marine 

traffic is expected to be minimal; 

additionally traffic will be allowed to 

enter the zone with the permission of 

the Captain of the Port Sector St. 

Petersburg or a designated 

representative. 

Assistance for Small Entities 

Under section 213(a) of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (Pub. L. 104–121), 

in the NPRM, we offered to assist small 

entities in understanding the rule so 

that they could better evaluate its effects 

on them and participate in the 

rulemaking process. 

Small businesses may send comments 

on the actions of Federal employees 

who enforce, or otherwise determine 

compliance with, Federal regulations to 

the Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

and the Regional Small Business 

Regulatory Fairness Boards. The 

Ombudsman evaluates these actions 

annually and rates each agency’s 

responsiveness to small business. If you 

wish to comment on actions by 

employees of the Coast Guard, call 1–

888–REG–FAIR (1–888–734–3247). The 

Coast Guard will not retaliate against 

small entities that question or complain 

about this rule or any policy or action 

of the Coast Guard. 

Collection of Information 

This rule calls for no new collection 

of information under the Paperwork 


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