In a recent development, companies are now being encouraged to voluntarily self-report any sanctions breaches they become aware of to UK and US law enforcement or sanctions enforcement agencies. The UK Office of Foreign Sanctions Implementation (OFSI) and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) have communicated through their heads that firms acting in good faith – particularly those that are self-reporting minor and unintentional sanctions breaches – could find some solace in their approach.
A decision to self-report is one that companies often grapple with, but these new comments seem to suggest that it could be a beneficial strategy in certain instances. Presumably, this is driven by a desire among these enforcement agencies to not only reward honest reporting from companies, but also facilitate an environment where firms are less fearful of the potential repercussions that stem from minor sanctions breaches, thus encouraging more transparency and cooperation.
However, it should be kept in mind that while these comments may suggest a softer touch, this doesn’t completely negate the potential ramifications involved in sanctions breaches. Therefore, when internally debating on whether to self-report or not, companies should still include a comprehensive evaluation of the potential legal consequences, impact on reputation, and future dealings with the agencies.
Legal professionals working in large corporations and law firms across the globe should note these developments as they could significantly shape their approach to managing any potential sanctions violations in the future.
For a full understanding of this evolving situation, consider reading the detailed analysis provided by WilmerHale on JD Supra.