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More quarters in the couch cushions: OFAC gets Park Strategies, LLC, to cough up $12,150

Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Park Strategies, LLC

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced that Park Strategies, LLC (“Park Strategies”), a lobbying firm located in New York, New York, has paid $12,150 to settle its potential civil liability for apparent violations of the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594 (GTSR).  Specifically, from on or about August 25, 2017 to on or about November 25, 2017, Park Strategies appears to have violated § 594.201 of the GTSR when it dealt in the property or interests in property of Al-Barakaat Group of Companies Somalia Limited (“Al-Barakaat”), a Specially Designated Global Terrorist (“SDGT”), when Park Strategies signed a contract with Al-Barakaat and subsequently received payment for its services from Al-Barakaat (the “Apparent Violations”).  The contract terms called for Park Strategies to provide lobbying services for Al-Barakaat, which were outside the scope of generally authorized activities under the GTSR, including the GTSR general license for legal services.  Park Strategies’ executives had actual knowledge of Al-Barakaat’s SDGT status and actively participated in the signing of the contract.  OFAC determined that Park Strategies voluntarily disclosed the Apparent Violations, and that the Apparent Violations constitute a non-egregious case.

From the enforcement information document:

The settlement amount reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines. Specifically, OFAC determined the following to be aggravating factors:

(1) Park Strategies’ executives had actual knowledge of, and participated in, the conduct that led to the Apparent Violations; and

(2) Park Strategies caused harm to the integrity of the GTSR by dealing in the property and interests in property of an SDGT designated for its terrorist financing operations.

OFAC determined the following to be mitigating factors:

(1) Park Strategies has not received a penalty notice or finding of violation from OFAC in the five years preceding the transaction giving rise to the Apparent Violations; and

(2) Park Strategies took remedial measures by suspending future performance on the contract with Al-Barakaat, by placing the funds in a blocked account, and adopting new OFAC screening procedures prior to entering into contracts with potential clients. 

and the lesson to be learned:

This enforcement action highlights important sanctions compliance considerations for attorneys, law firms, and legal services organizations seeking to represent blocked persons as clients. Most sanctions programs administered by OFAC have general licenses authorizing the provision of certain enumerated legal services to persons blocked pursuant to those sanctions programs. The provision to blocked persons of legal services not enumerated in such general licenses requires a specific license from OFAC. Other related professional services such as lobbying, public relations, government affairs, consulting, and business development are not legal services, and are generally not covered by general licenses authorizing the provision of legal services to blocked persons. In addition, attorneys, law firms, or legal services organizations engaged in the practice of law (or persons acting on their behalf) cannot avail themselves of the authorizations contained in general or specific licenses authorizing the provision of legal services to blocked person when engaging in activities that do not fall within the scope of generally or specifically licensed legal services. Moreover, attorneys, law firms, and legal services organizations should exercise caution and care regarding their sanctions obligations before knowingly engaging with blocked persons.

And, of course, there is a paragraph about the Framework document:

As noted in OFAC’s Framework for Compliance Commitments, misinterpreting, or failing to understand the applicability of, OFAC’s regulations, including general licenses, has previously caused organizations to commit sanctions violations. U.S. persons can mitigate sanctions risk by exercising caution when representing individuals or entities identified on OFAC’s SDN List by understanding the full scope and applicability of authorizations as they relate to the prohibitions of the GTSR and other sanctions programs.

Mr. Watchlist is of two minds on this enforcement action. Clearly, the fact that company management knew that Al-Barakat was an SDGT means the firm was worthy of a fine. On the other hand, is this the best use of OFAC resources – catching a single $30,000 lobbying services fine? And the “lesson”, while technically valid, is a bit of a stretch to justify putting in here.

Mr. Watchlist likes the old model, where smaller fines were hidden behind multiple links – it used to be that the “public” page would just say “New OFAC Enforcement Information can be found here,” with no mention of the firm name. While there is some importance in naming and shaming larger firms, I’m not sure the public interest is served by the publicity in cases like these.

Link:

OFAC Notice

OFAC Enforcement Action

Categories: Civil Monetary Penalties Enforcement Actions OFAC Updates Terrorism

eric9to5

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