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OFAC-a-Rama: Updated Venezuela GL , Updated TCO regulations, Civil Monetary Penalty definition update

Issuance of Venezuela-related General License 5I and Updated Frequently Asked Question; Issuance of Amended Transnational Criminal Organizations Sanctions Regulations; Amendment of the definition of the term “Applicable Schedule Amount” 

Release date01/20/2022Body

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 5I, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After January 20, 2023.”  In addition, OFAC is updating related Frequently Asked Question 595.  

In addition, OFAC is amending the Transnational Criminal Organizations Sanctions Regulations and reissuing them in their entirety.  This regulatory amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on January 21, 2022.

In addition, OFAC is amending the definition of “applicable schedule amount”contained in appendix A to 31 CFR part 501. This technical amendment is currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on January 21, 2022.

Here’s the fun part – the “applicable schedule amount” change:

On September 8, 2008, OFAC issued as an interim final rule the “Economic Sanctions Enforcement Guidelines” (Enforcement Guidelines) as appendix A to the Reporting, Procedures and Penalties Regulations at 31 CFR part 501 (73 FR 51933, September 8, 2008). On November 9, 2009, OFAC re-issued as a final rule the Enforcement Guidelines (74 FR 57593, November 9, 2009). OFAC’s Enforcement Guidelines provide a general framework for the enforcement of all economic sanctions programs administered by OFAC. Section V.B.2.a.ii. of the Enforcement Guidelines states that the base amount of a proposed civil penalty in a Pre-Penalty Notice shall be the “applicable schedule amount,” subject to certain caps noted in that section, where the case is deemed non-egregious and the apparent violation has come to OFAC’s attention by means other than a voluntary self-disclosure. Section I.B. of the Enforcement Guidelines provides a definition of “applicable schedule amount.”

Separately, as required by the Federal Civil Penalties Inflation Adjustment Act (1990 Pub. L. 101-410, 104 Stat. 890; 28 U.S.C. 2461 note), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74, 129 Stat. 599, 28 U.S.C. 2461 note) (the FCPIA Act), OFAC has adjusted its CMPs seven times since the FCPIA Act went into effect on November 2, 2015: an initial catch-up adjustment on August 1, 2016 (81 FR 43070, July 1, 2016); an additional initial catch-up adjustment related to CMPs for failure to comply with a requirement to furnish information, the late filing of a required report, and failure to maintain records that were inadvertently omitted from the August 1, 2016 initial catch-up adjustment on October 5, 2020 (85 FR 54911, September 3, 2020); and annual adjustments on February 10, 2017 (82 FR 10434, February 10, 2017); March 19, 2018 (83 FR 11876, March 19, 2018); June 14, 2019 (84 FR 27714, June 14, 2019); April 9, 2020 (85 FR 19884, April 9, 2020); and March 17, 2021 (86 FR 14534, March 17, 2021).

OFAC’s applicable schedule amount values in the Enforcement Guidelines, while not required to be adjusted pursuant to the FCPIA Act, correspond in certain ways with OFAC’s CMPs. As a result, OFAC issued final rules on August 11, 2020 (85 FR 48474, August 11, 2020) and April 12, 2021 (86 FR 18895, April 12, 2021) amending the definition of “applicable schedule amount” in section I.B. of appendix A to 31 CFR part 501 to adjust applicable schedule amount values for transactions valued at $200,000 or more to correspond with recent CMP adjustments required by the FCPIA Act.

By a separate rule, OFAC will publish its annual adjustment of CMPs pursuant to the FCPIA Act for 2022. Today, OFAC is amending the definition of “applicable schedule amount” in section I.B. of appendix A to 31 CFR part 501 to automatically adjust the applicable schedule amount value for transactions valued at $200,000 or more as new CMP adjustments are published. Specifically, OFAC is amending section I.B.7. such that in the case of transactions valued at $200,000 or more, the applicable schedule amount is equivalent to the statutory maximum civil penalty per violation of the International Emergency Economic Powers Act (50 U.S.C. 1701–1706, at 1705) listed in section V.B.2.a.v of appendix A to 31 CFR part 501. This change is not required pursuant to the FCPIA Act; however, OFAC is making this change to ensure the applicable schedule amount value continues to correspond appropriately to OFAC’s CMPs as the CMPs are adjusted annually pursuant to the FCPIA Act. In addition, OFAC is making technical edits to the authority citation to conform to Federal Register guidance.

Links:

OFAC Notice

Venezuela General License 5I

Updated FAQ 595

TCO Sanctions Regulations

Change to “applicable schedule amount”

Categories: Enforcement Actions Enforcement Guidelines Frequently Asked Questions (FAQ) Guidance Licenses OFAC Updates Organized Crime Sanctions Venezuela sanctions

eric9to5

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