CUNA Regulatory Comment Call

October 6, 2008

OFAC Enforcement Guidelines

EXECUTIVE SUMMARY

Please feel free to send your comments to CUNA SVP & Deputy General Counsel Mary Dunn at mdunn@cuna.com or to Assistant General Counsel Lilly Thomas at lthomas@cuna.com; or mail them to Lilly c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004. Click here for a copy of the proposed rule.

BACKGROUND

OFAC administers and enforces economic sanctions against targeted foreign countries and regimes, terrorists and terrorist organizations, narcotic traffickers, and others in furtherance of U.S. national security. OFAC requires all financial institutions, including credit unions, to block or "freeze" and report property and payment of any funds transfers or transactions involving blocked countries or individuals. Blocked countries and individuals appear on OFAC’s “Specially Designated Nationals and Blocked Persons” List. Failure to block and report an “illicit transfer” may subject the credit union to administrative action, civil fines, and possibly criminal penalties.

OFAC previously published proposed economic sanctions enforcement Guidelines, which provided a schedule of proposed civil monetary penalties for certain violations as well as a framework for its enforcement actions.

Last year, amendments to the International Emergency Economic Powers Act, a principal statutory authority for most OFAC sanctions programs, substantially increased the maximum penalties for violations. As a result, these new Guidelines were developed for determining an appropriate enforcement response, including the amount of any civil monetary penalty if applicable, to OFAC violations.

DISCUSSION

QUESTIONS REGARDING THE GUIDELINES

  1. Do you believe the General Factors are appropriate for determining an appropriate enforcement response?
    a. Yes _____
    b. No _____
    If not, are there other factors that should be removed or added? Please explain.
















  2. Do you agree with how an egregious case is determined?
    a. Yes _____
    b. No _____
    Please explain.
















  3. Do you agree with the process for determining a civil penalty amount?
    a. Yes _____
    b. No _____
    Please explain.
















  4. Do you agree with the process of sending pre-penalty notices before a final penalty determination is made?
    a. Yes _____
    b. No _____
    Please explain.
















  5. Please provide any other changes you believe would make OFAC enforcement more transparent and useful to individuals subject to the sanctions programs administered or enforced by OFAC.
















Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Lilly Thomas • Assistant General Counsel • (202) 508-6733 • lthomas@cuna.com
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 • lmartone@cuna.com