You’ve Got an OFAC Subpoena: What Does It Mean?

An OFAC Subpoena is an official request, or rather, demand from the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury, to provide specific documents, materials, and information in compliance with American sanction policies.

Accompanying the OFAC subpoena is a cover letter explaining why you have received the subpoena, what is required from you in response, and indicating the deadline by which your response is expected. Also included with the subpoena is a Certificate of Compliance, which you must fill out after gathering all documents and answering all questions. You are assumed to be completing this certificate under oath, certifying that all provided information is “true, accurate, and complete.” You are also warned that you may be held accountable for providing false statements under U.S. law.

The cover letter typically states that, according to OFAC, you or your company may be involved in transactions subject to U.S. sanctions, such as those regarding Russia, and that OFAC is investigating accordingly. Usually, you must respond to all questions of the subpoena and provide all necessary documents and information within thirty days.

In essence, the OFAC subpoena is the final step before OFAC decides whether to impose personal sanctions against you and/or your company and potentially take civil or even criminal action. Therefore, this document must not be ignored, answered incompletely, or beyond the specified deadline. The consequences of not complying with it can be very devastating, including hefty fines and even criminal prosecution.

What Does the OFAC Subpoena Contain?

The OFAC subpoena contains references to the US laws and other regulatory acts, based on which OFAC makes a reasonable assumption that you or your company are or have been violating US sanctions, for example, regarding Russia or Belarus, and in accordance with which OFAC is conducting this investigation. Many questions related to U.S. sanctions can be answered on the OFAC website in the “Frequently Asked Questions” section.

The OFAC subpoena also includes a list of all individuals and/or companies (if any) who have already been sanctioned and with whom your activities or those of your company are presumably associated. OFAC may also specify actions that you or your company are presumed to have taken that fall under the prohibition of U.S. sanctions.

The OFAC subpoena provides a detailed list of documents and other information that you must gather and provide within the specified timeframe. For instance:

• A detailed description of all transactions, direct or indirect, including (1) imports of goods, services, or technologies, (2) exports of goods, services, or technologies, or (3) fund transfers, issuance of letters of credit, loan agreements, or any other forms of financing related to the company, its branches, subsidiaries, divisions, and representations, as well as employees, agents, representatives, or distributors, including names, positions, and workplaces of all individuals who have worked for the company.
• A detailed description of all instances where the company, its branches, subsidiaries, divisions, and representations, as well as employees, agents, representatives, or distributors, have been directly or indirectly involved in transactions with individuals or companies subject to US sanctions (those individuals and companies are usually listed in the OFAC subpoena).
• Copies of all sales, services, distribution, marketing, and partnership contracts, as well as proposals for cooperation and correspondence with sanctioned individuals or companies (those individuals and companies are usually listed in the OFAC subpoena).
• The names, surnames, and addresses of all individuals and names and addresses of all companies that participated in transactions between the specified parties.

The abovementioned requirements constitute approximately one-third of all the requirements contained in an OFAC subpoena received by one of the companies engaged in import-export operations between Russia, the United States, and several other countries.

What Should You Do?

As the example above shows, the volume of required documents and materials is quite substantial. Thirty days to gather and provide them is a very short timeframe. It will be very challenging to gather, describe, comment on, and submit everything on time. If you have enough strength and resources, you can either do this on your own or engage OFAC lawyers practicing US sanctions law and representing their client’s interests in OFAC.

Taking the OFAC subpoena seriously is crucial. Much will depend on whether you and/or your company are subject to US sanctions. But that’s not all. Significant fines can be imposed on individuals and companies for violating the US sanction regime, and individuals may also face criminal charges.

Therefore, if you receive an OFAC subpoena, the first thing you should do is decide whether you can respond to it independently or if you need to engage OFAC lawyers. Consider the complexity of the situation, its far-reaching consequences, and the high price of incorrect or careless actions.

It’s worth noting that if you cannot respond to the OFAC subpoena within the thirty-day period, you can request an extension by writing a letter to the OFAC officer specified as the contact person in the subpoena and cover letter. The most important thing is to respond to the OFAC subpoena questions with utmost responsibility and prudence.