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Breaking news: OFAC leaves money on the table

My friend at OFAC confirmed, off the record, of course, that the statutory maximum civil penalty for the Kingpin Act is still $1,075,000.

So, I whipped out my browser and my calculator and did the math. In June 2002, the CPI-U (used for calculating the adjustment) was, according to the Federal Register, 179.9. In June 2012, according to the BIS website, it was 229.478. That is an increase of over 27.5%.

Increasing the $1,075,000 by that amount yields over $1,370,000. Using the rounding formula in the Federal Civil Penalties Inflation Adjustment Act, the maximum penalty would be adjusted upwards to $1,375,000. Not bad.

Such adjustments, if they were done across the board at OFAC (and the other agencies that are likely not to have kept up with the FCPIA requirements), would not only yield more revenue (as the average penalty would likely rise in turn), but would also be more of deterrent to those contemplating skirting the regulations in the future.

Mr. Watchlist also went to whitehouse.gov to gently suggest that agencies play catch-up – if only to generate more revenue in the age of austerity and sequesters. If the administration responds, I'll post relevant sections.

 

Categories: Sanctions Regulations

eric9to5

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