New Sanctions Penalties Regulations by OFAC Become Effective
Estimated reading time: 2–4 minutes
Date: 2026-09-25
The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury has announced new Sanctions Penalties Regulations, effective today. These regulations compile existing penalties for various sanctions programs. There are no new penalties introduced with this rule.
OFAC is responsible for enforcing economic and trade sanctions based on U.S. foreign policy and national security goals. These sanctions target foreign governments, individuals, and entities.
This regulation focuses on penalties for violations under the International Emergency Economic Powers Act (IEEPA) and the United Nations Participation Act (UNPA). Current sections in 31 CFR chapter V will be updated to reflect cross-references to this new part, ensuring standardization.
OFAC can impose civil penalties of up to $377,700 or twice the amount of the transaction involved. Offenses under both IEEPA and UNPA may also lead to criminal penalties. These include to a possible fine of $1,000,000 or up to 20 years in prison.
The regulation allows for reduction of penalties if OFAC learns of a violation through voluntary self-disclosure. Violations can also be referred to other law enforcement agencies for criminal prosecution.
The new regulations include terms related to their enforcement. The IEEPA provides the framework for enforcement, and OFAC manages the investigation process. These regulations include sections on how the penalties relate to other laws, definitions, procedures, and the administrative process for penalties. These are detailed across Subparts A through E in Part 505 of the regulations.
OFAC’s rule does not entail substantive changes in regulations, negating the need for a public comment period. This final rule falls under the criteria exempting it from public commentary based on the foreign affairs function.
Additionally, these regulations address procedures for engagement and communication with involved parties. Alleged violators can respond to OFAC notices and may face settlement or penalty notices based on findings.
The information taken for drafting this rule was done in consultation with the Department of Justice to ensure alignment on any criminal provisions and their implementation.
For complete details, individuals and entities are encouraged to visit OFAC’s official website. The rule’s adoption highlights ongoing efforts to maintain transparency and consistency in sanction enforcement policies.
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