It is important to cooperate with the bank and provide all information necessary to release the funds. They may ask more in-depth questions about the transfer at a certain time and, during this time, they may hold the transfer until they have made a decision regarding any sanctions compliance issues. The compliance department of the bank may ask various questions. Even if it is a wire transfer to and from the United States, if there may be an underlying sanctions issue, or if there are any similarities of names of persons or entities on the SDN, they may investigate the wire transfer. Why a Would a Wire Transfer be Under OFAC InvestigationĪ person’s wire transfer may be under OFAC investigation by a bank because they may have noted something suspicious or a compliance issue with the wire transfer. The US government takes sanctions violations very seriously, and any kind of dodging or avoiding of fines or punishment levied by OFAC is considered a detriment to US sanctions policy. If a fine is levied or a company abroad is not cooperating, they could seize certain funds or assets in the United States or abroad to pay for the fine. However, the US government provides great deference to OFAC. At times, they are judicially litigated during or after OFAC’s decision. The fines are based on the number of violations, the number of times the violations occurred, and the statutory amount that is set in place in the specific sanctions regime that was violated.Īt first, fines are levied by OFAC after an administrative proceeding in OFAC. The act may incur criminal liability and imprisonment based on the jurisdiction that the United States has over for the person or entity. A lack of response would increase the fine due to lack of cooperation. Penalties for using cryptocurrency to bypass US banks and OFAC’s sanctions include fines after an investigation by OFAC, which may start from an administrative subpoena. Penalties for Using Cryptocurrency to Bypass US Banks and OFAC’s Sanctions It is well advised to consult with an OFAC sanctions attorney before using cryptocurrencies to pay or deal in property for international trade with any company, particularly those in sanctioned countries like Iran.
In fact, the use of cryptocurrencies to bypass US banks would increase the likelihood of some form of administrative action, and the consequences of such a fine would increase due to willfully violating US sanctions if it is found that a company is using cryptocurrency simply to bypass US international financial institutions and to avoid a review for sanctions compliance.
Cryptocurrencies are recognized as property, and dealings in property are still prohibited and incur sanctions liability.
The use of cryptocurrencies for financial dealings with sanctioned persons or entities is impermissible. Using Cryptocurrency to Bypass US banks and OFAC Sanctions? If you want to know more about cryptocurrency and the legality of using cryptocurrency to bypass sanctions against Iran or any other sanctioned nation, speak with an intelligent OFAC lawyer today. While the use of cryptocurrency might seem like an easy solution, it can have major legal repercussions. Sanction programs can make it difficult to conduct business as usual, especially when it comes to the wiring and transferring of funds.
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