The Department of the Treasury's Office of Foreign Assets Control issued final regulations titled Sanctions Penalties Regulations. The regulations are effective September 25, 2026.

The rule standardizes penalty provisions across multiple sanctions programs without making substantive changes to existing penalty amounts or enforcement procedures. The Sanctions Penalties Regulations consolidate previously existing information regarding penalties applicable to multiple sanctions programs implemented by the Office of Foreign Assets Control.

The regulations contain information regarding penalties for violations of sanctions issued pursuant to the International Emergency Economic Powers Act and the United Nations Participation Act. Civil penalties under the International Emergency Economic Powers Act are capped at the greater of $377,700 or twice the transaction value.

Why It Matters

The Office of Foreign Assets Control was established in 1959 as part of the U.S. Department of the Treasury and is responsible for administering and enforcing economic and trade sanctions based on U.S. foreign policy and national security goals. The Office of Foreign Assets Control (OFAC) has historically enforced civil penalties under the International Emergency Economic Powers Act (IEEPA), with maximum penalty amounts adjusted annually for inflation, as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990 and its 2015 Improvements Act.

In 2024, OFAC published a final rule amending civil penalty provisions in 17 parts of its regulations, specifically those governed by the International Emergency Economic Powers Act (IEEPA), as part of ongoing efforts to streamline enforcement procedures. In 2024, OFAC amended nine sections of its Regulations to update penalty provisions, including adjustments to recordkeeping requirements and enforcement guidelines, reflecting ongoing regulatory refinement under the International Emergency Economic Powers Act.

Timeline

Prior to the 2026 regulations, OFAC had issued multiple final rules adjusting civil monetary penalties for inflation, including one published on September 13, 2024, which included a 30-day public comment period. In 2025, the maximum civil monetary penalty for violations of IEEPA was set at $377,700, effective January 15, 2025, reflecting an annual inflation adjustment under the Federal Civil Penalties Inflation Adjustment Act. OFAC's 2025 inflation adjustment increased IEEPA civil penalties to $377,700, effective January 15, 2025, aligning with the Federal Civil Penalties Inflation Adjustment Act's requirement for annual cost-of-living adjustments.

The Office of Foreign Assets Control will update parts within 31 CFR chapter V to replace existing penalties information with cross-references to the Sanctions Penalties Regulations.

What's New

OFAC's enforcement guidelines state that voluntary self-disclosure of apparent violations can lead to a reduction in the base amount of any proposed civil penalty, as outlined in the Economic Sanctions Enforcement Guidelines.

How Sources Differ

Regarding the Office of Foreign Assets Control, federalregister.gov states that the Office of Foreign Assets Control (OFAC) has historically enforced civil penalties under the International Emergency Economic Powers Act (IEEPA), with maximum penalty amounts adjusted annually for inflation, as mandated by the Federal Civil Penalties Inflation Adjustment Act. The Office of Foreign Assets Control Sanctions Penalties Regulations final rule states that the Office of Foreign Assets Control will update parts within 31 CFR chapter V to replace existing penalties information with cross-references to the Sanctions Penalties Regulations.