OFAC Voluntary Self-Disclosure

Voluntary self-disclosure is an unprompted report of an apparent sanctions violation to the Office of Foreign Assets Control (OFAC), made before OFAC or any other authority learns of it, which halves the base amount of the civil penalty. OFAC's Economic Sanctions Enforcement Guidelines, published on November 9, 2009 at 31 CFR (Code of Federal Regulations) part 501, Appendix A, set out how OFAC computes a civil penalty. The starting point is strict liability. A payment to a blocked person is a violation even if nobody knew, and intent only moves the amount. The matrix crosses two questions. Is the case egregious, judged on willfulness or recklessness, awareness of the conduct, harm to the program and the profile of the party? Was there a voluntary self-disclosure? In a non-egregious case, disclosure brings the base amount down to one-half of the transaction value, capped per violation at one-half of the statutory maximum, which was $188,850 after the 2025 adjustment. Without it, a schedule by value bracket applies, capped at $377,700. In an egregious case, disclosure yields one-half of the statutory maximum instead of the full maximum. It still counts if made at the same time as that discovery, provided it is complete. A bank's blocking report on a stopped payment does not stand in for it, and a half-finished file invites argument. Cooperation without disclosure usually earns a 25 to 40 percent reduction. An insurer meets the rule in two ways. On its own account, when a claim payment, a premium refund or a subrogation recovery has reached a blocked person, often through the 50 percent rule. The decision to disclose is then made in the weeks after discovery, and the claims file becomes the central exhibit. On behalf of an insured, when a ransom payment raises the same question; in its advisory of September 21, 2021, OFAC said it would weigh prompt and complete reporting to the authorities.