Rule2026-19678
Sanctions Penalties Regulations
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 25, 2026
Effective
September 25, 2026
Issuing agencies
Treasury DepartmentForeign Assets Control Office
Abstract
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is adding the Sanctions Penalties Regulations. These new regulations consolidate previously existing information regarding penalties applicable to multiple sanctions programs implemented by OFAC.
Full Text
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<title>Federal Register, Volume 91 Issue 185 (Friday, September 25, 2026)</title>
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[Federal Register Volume 91, Number 185 (Friday, September 25, 2026)]
[Rules and Regulations]
[Pages 60821-60825]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19678]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 505
Sanctions Penalties Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is adding the Sanctions Penalties Regulations. These new
regulations consolidate previously existing information regarding
penalties applicable to multiple sanctions programs implemented by
OFAC.
DATES: This rule is effective September 25, 2026.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Regulatory Affairs, 202-622-4855; or <a href="https://ofac.treasury.gov/contact-ofac">https://ofac.treasury.gov/contact-ofac</a>.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website: <a href="https://ofac.treasury.gov">https://ofac.treasury.gov</a>.
Background
OFAC administers and enforces U.S. economic and trade sanctions
programs against targeted foreign governments, individuals, groups, and
entities in accordance with national security and foreign policy goals
and objectives. OFAC is responsible for the civil investigation and
enforcement of economic sanctions violations under Presidential
national emergency powers and specific legislation, including the
International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)
(IEEPA).
In this rule, OFAC is reproducing information regarding enforcement
procedures and penalties, including the rights of U.S. persons being
investigated for violations, that are currently located in individual
parts of 31 CFR chapter V into a new part, the Sanctions Penalties
Regulations (the ``Regulations''). This initial promulgation of the
Regulations contains information regarding penalties for violations of
sanctions issued pursuant to IEEPA and the United Nations Participation
Act, as amended (22 U.S.C. 287c(b)) (UNPA). No substantive changes to
these penalty provisions are being made with this rule. Following
publication of this part, OFAC will update parts within 31 CFR chapter
V to replace existing penalties information with cross-references to
the Regulations, to help standardize penalties provisions and to ease
compliance with the Federal Civil Penalties Inflation Adjustment Act of
1990, as amended (Pub. L. 101-410, 104 Stat. 890, as amended; 28 U.S.C.
2461 note) (FCPIA). Civil penalty amounts are subject to 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), as well
as FCPIA. The FCPIA Act requires each Federal agency with statutory
authority to assess CMPs and adjust them annually for inflation
according to a formula described in section 5 of the FCPIA Act.
Subpart A of the Regulations clarifies the relation of this part to
other laws and regulations, describes penalty information that is
released to the general public, and sets forth a Paperwork Reduction
Act notice.
Subpart B of the Regulations contains the definition of two terms
used throughout the Regulations and refers to other parts of 31 CFR
chapter V for additional definitions.
Subpart D of the Regulations describes the IEEPA civil penalty
process, from the issuance of a pre-penalty notice to a final agency
action. IEEPA provides for civil monetary penalties (CMP) of up to the
greater of $377,700 or twice the value of a transaction. Subpart E of
the Regulations provides information on UNPA penalties.
In determining civil penalties, OFAC considers the facts and
circumstances surrounding an apparent violation, including whether any
of the following are present: willful or reckless violation of law,
awareness of conduct at issue, or harm to sanctions program objectives.
Base penalties are halved in cases for which OFAC learns of the
violation through a voluntary self-disclosure to OFAC. Both IEEPA and
UNPA include criminal penalties; OFAC may refer apparent sanctions
violations to appropriate law enforcement agencies for criminal
investigation and/or prosecution. Apparent sanctions violations that
OFAC has referred for criminal investigation and/or prosecution may
nevertheless be subject to OFAC civil penalty or other administrative
action.
In addition to IEEPA penalties, OFAC also may levy civil penalties
for sanctions violations pursuant to additional statutes. Penalties for
certain additional statutes can be found in the following sections of
the CFR: (a) the Trading with the Enemy Act (50 U.S.C. 4301-4341, at
4315), penalties at 31 CFR 501.700 through 501.747; (b) section 2339B
of the Antiterrorism and Effective
[[Page 60822]]
Death Penalty Act of 1996 (18 U.S.C. 2339B), penalties at 31 CFR
597.701 through 597.705; (c) the Foreign Narcotics Kingpin Designation
Act (21 U.S.C. 1901-1908, at 1906), penalties at Sec. Sec. 598.701
through 598.706; and (d) the Clean Diamond Trade Act (19 U.S.C. 3901-
3913, at 3907), penalties at appendix A to 31 CFR part 501.
Public Participation
Because the Regulations involve a foreign affairs function, do not
make substantive changes to OFAC's sanctions programs, and constitute a
rule of agency procedure, notice and comment rulemaking would be
impracticable, unnecessary, or contrary to the public interest.
Accordingly, the provisions of E.O. 12866 of September 30, 1993,
``Regulatory Planning and Review'' (58 FR 51735,October 4, 1993), as
amended, and the Administrative Procedure Act (5 U.S.C. 553) requiring
notice of proposed rulemaking, opportunity for public participation,
and delay in effective date, as well as the provisions of E.O. 14192 of
January 31, 2025, ``Unleashing Prosperity Through Deregulation'' (90 FR
6065, February 6, 2025), and E.O. 14219 of February 19, 2025,
``Ensuring Lawful Governance and Implementing the President's
`Department of Government Efficiency' Deregulatory Initiative'' (90 FR
10583, February 25, 2025), are inapplicable. Because no notice of
proposed rulemaking is required for this rule, the Regulatory
Flexibility Act (5 U.S.C. 601-612) does not apply.
Executive Order 14294
Section 5 of E.O. 14294 of May 9, 2025, ``Fighting
Overcriminalization in Federal Regulations'' (90 FR 20367, May 14,
2025), directs that all future notices of proposed rulemaking (NPRMs)
and final rules published in the Federal Register, the violation of
which may constitute criminal regulatory offenses, should include a
statement identifying that the rule or proposed rule is a criminal
regulatory offense and the authorizing statute. E.O. 14294 directs
agencies to draft this statement in consultation with the Department of
Justice.
E.O. 14294 further directs that the regulatory text of all NPRMs
and final rules with criminal consequences published in the Federal
Register after May 9, 2025, should explicitly state a mens rea
requirement for each element of a criminal regulatory offense,
accompanied by citations to the relevant provisions of the authorizing
statute.
Willful violations of the regulations set forth in this final rule
may be subject to criminal penalties pursuant to 50 U.S.C. 1705 and
regulations promulgated thereunder. The statutory authority for
criminal liability requires a mens rea of willfulness as an element
pursuant to 50 U.S.C. 1705(c). In drafting this statement, OFAC has
consulted with the Department of Justice.
Paperwork Reduction Act
The collections of information related to the Regulations are
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44
U.S.C. 3507), those collections of information have been approved by
the Office of Management and Budget under control number 1505-0164. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number.
List of Subjects in 31 CFR Part 505
Administrative practice and procedure, Banks, Banking, Blocking of
assets, Credit, Foreign trade, Penalties, Reporting and recordkeeping
requirements, Sanctions, Securities, Services.
0
For the reasons set forth in the preamble, OFAC adds part 505 to 31 CFR
chapter V to read as follows:
PART 505--SANCTIONS PENALTIES REGULATIONS
Subpart A--General Provisions
Sec.
505.101 Relation of this part to other laws and regulations.
505.102 Certain civil penalties information released.
505.103 Paperwork Reduction Act notice.
Subpart B--General Definitions
505.201 Definitions.
505.202 IEEPA.
505.203 OFAC.
Subpart C--[Reserved]
Subpart D--International Emergency Economic Powers Act Penalties and
Findings of Violation
505.401 Penalties.
505.402 Pre-Penalty Notice; settlement.
505.403 Penalty imposition.
505.404 Administrative collection; referral to United States
Department of Justice.
505.405 Findings of Violation.
Subpart E--United Nations Participation Act Penalties
505.501 Penalties.
Authority: 3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601 et
seq., 1701 et seq.; 22 U.S.C. 287c; 28 U.S.C. 2461 note (Pub. L.
101-410, 104 Stat. 890, as amended).
Subpart A--General Provisions
Sec. 505.101 Relation of this part to other laws and regulations.
This part sets forth standard sanctions penalty regulations
applicable to transactions regulated pursuant to other parts codified
in this chapter, as well as to economic sanctions programs for which
implementation and administration are delegated to OFAC. Substantive
prohibitions, definitions, interpretations, and licenses particular to
each economic sanctions program are not contained in this part but are
set forth in the particular part of this chapter dedicated to that
program and OFAC's website, <a href="https://ofac.treasury.gov">https://ofac.treasury.gov</a>, or, in the case
of economic sanctions programs not yet implemented in regulations, in
the applicable Executive order or other authority. Violations of
certain economic sanctions programs are subject to additional
penalties; information about these will be found in the particular part
of this chapter dedicated to that program.
Sec. 505.102 Certain civil penalties information released.
(a) After the conclusion of a civil penalties proceeding that
results in either the imposition of a civil monetary penalty or a
settlement agreement, OFAC shall make available to the public certain
information on a routine basis, not less frequently than monthly, as
follows:
(1) In each such proceeding against an entity, OFAC shall make
available to the public:
(i) The name and location of the entity involved;
(ii) The sanctions program(s) involved;
(iii) A brief description of the violation or apparent violation;
(iv) A clear indication whether the proceeding resulted in a
settlement agreement or the imposition of penalties;
(v) An indication whether the entity voluntarily disclosed the
violation or apparent violation to OFAC; and
(vi) The amount of the penalty imposed or the amount of the agreed
settlement.
(2) In such proceedings against individuals, OFAC shall release on
an aggregate basis:
(i) The number of penalties imposed and settlement agreements
reached;
(ii) The sanctions program(s) involved;
(iii) A brief description of the violations or apparent violations;
(iv) A clear indication whether the proceedings resulted in
settlement
[[Page 60823]]
agreements or in the imposition of penalties; and
(v) The amounts of the penalties imposed and the amounts of the
agreed settlements.
(b) The medium through which information will be made available to
the public is OFAC's website at <a href="https://ofac.treasury.gov">https://ofac.treasury.gov</a>.
(c) The information made available pursuant to paragraph (a) of
this section shall generally not include the following:
(1) The name of any violator or alleged violator who is an
individual.
(2) Records or information obtained or created in the
implementation of part 598 of this chapter.
(d) On a case-by-case basis, OFAC may release additional
information concerning a particular civil penalties proceeding.
Sec. 505.103 Paperwork Reduction Act notice.
For approval by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information
collections relating to recordkeeping and reporting requirements,
licensing procedures, and other procedures, see Sec. 501.901 of this
chapter. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a valid control number assigned by OMB.
Subpart B--General Definitions
Sec. 505.201 Definitions.
This part includes terms that may differ among various sanctions
regulations administered by OFAC. When analyzing a procedure, penalty,
or transaction, the appropriate definition is the one contained in the
part relating to the associated sanctions regulations. In the case of
economic sanctions programs for which implementation and administration
are delegated to OFAC but for which regulations have not yet been
issued, the definitions of terms in this part are governed by
definitions contained in the implementing statute or Executive order.
Sec. 505.202 IEEPA.
The term IEEPA means the International Emergency Economic Powers
Act (50 U.S.C. 1701 et seq.).
Sec. 505.203 OFAC.
The term OFAC means the Department of the Treasury's Office of
Foreign Assets Control.
Subpart C--[Reserved]
Subpart D--International Emergency Economic Powers Act Penalties
and Findings of Violation
Sec. 505.401 Penalties.
(a) The penalties available under section 206 of IEEPA (50 U.S.C.
1705) are applicable to violations of the provisions of any regulation,
ruling, instruction, order, directive, or license issued by or pursuant
to the direction or authorization of the Secretary of the Treasury
pursuant to the applicable part of this chapter or otherwise under
IEEPA.
(1) A civil penalty not to exceed the amount set forth in section
206 of IEEPA may be imposed on any person who violates, attempts to
violate, conspires to violate, or causes a violation of any regulation,
ruling, instruction, order, directive, license, or prohibition issued
under IEEPA.
(2) IEEPA provides for a maximum civil penalty not to exceed the
greater of $377,700 or an amount that is twice the amount of the
transaction that is the basis of the violation with respect to which
the penalty is imposed.
(3) A person who willfully commits, willfully attempts to commit,
willfully conspires to commit, or aids or abets in the commission of a
violation of any regulation in the applicable part of this chapter,
ruling, instruction, order, directive, license, or prohibition may,
upon conviction, be fined not more than $1,000,000, or if a natural
person, be imprisoned for not more than 20 years, or both.
(b)(1) The civil penalties provided in IEEPA are subject to
adjustment pursuant to the Federal Civil Penalties Inflation Adjustment
Act of 1990 (28 U.S.C. 2461 note, Pub. L. 101-410, as amended).
(2) The criminal penalties provided in IEEPA are subject to
adjustment pursuant to 18 U.S.C. 3571.
(c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the
jurisdiction of the executive, legislative, or judicial branch of the
Government of the United States, knowingly and willfully falsifies,
conceals, or covers up by any trick, scheme, or device a material fact;
or makes any materially false, fictitious, or fraudulent statement or
representation; or makes or uses any false writing or document knowing
the same to contain any materially false, fictitious, or fraudulent
statement or entry shall be fined under title 18, United States Code,
imprisoned, or both.
Sec. 505.402 Pre-Penalty Notice; settlement.
(a) When required. If OFAC has reason to believe that there has
occurred a violation of any provision of the applicable part of this
chapter or a violation of the provisions of any regulation, ruling,
instruction, order, directive, or license issued by or pursuant to the
direction or authorization of the Secretary of the Treasury pursuant to
the applicable part of this chapter or otherwise under IEEPA and
determines that a civil monetary penalty is warranted, OFAC will issue
a Pre-Penalty Notice informing the alleged violator of the agency's
intent to impose a monetary penalty. A Pre-Penalty Notice shall be in
writing. The Pre-Penalty Notice may be issued whether or not another
agency has taken any action with respect to the matter. For a
description of the contents of a Pre-Penalty Notice, see appendix A to
part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to respond to a Pre-Penalty Notice by making a written
presentation to OFAC. For a description of the information that should
be included in such a response, see appendix A to part 501 of this
chapter.
(2) Deadline for response. A response to a Pre-Penalty Notice must
be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of
this section. The failure to submit a response within 30 days shall be
deemed to be a waiver of the right to respond.
(i) Computation of time for response. A response to a Pre-Penalty
Notice must be postmarked or date-stamped by the U.S. Postal Service
(or foreign postal service, if mailed abroad) or courier service
provider (if transmitted to OFAC by courier), or dated if sent by
email, on or before the 30th day after the postmark date on the
envelope in which the Pre-Penalty Notice was mailed or date the Pre-
Penalty Notice was sent by email. If the Pre-Penalty Notice was
personally delivered by a non-U.S. Postal Service agent authorized by
OFAC, a response must be postmarked or date-stamped on or before the
30th day after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
Federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to a Pre-Penalty Notice
need not be in any particular form, but it must be typewritten and
signed by the alleged violator or a representative thereof (electronic
signature is
[[Page 60824]]
acceptable), contain information sufficient to indicate that it is in
response to the Pre-Penalty Notice, and include the OFAC identification
number listed on the Pre-Penalty Notice. The response must be sent to
OFAC's Enforcement Division by mail, courier, or email and must be
postmarked or date-stamped in accordance with paragraph (b)(2) of this
section.
(c) Settlement. Settlement discussion may be initiated by OFAC, the
alleged violator, or the alleged violator's authorized representative.
For a description of practices with respect to settlement, see appendix
A to part 501 of this chapter.
(d) Guidelines. Guidelines for the imposition or settlement of
civil penalties by OFAC are contained in appendix A to part 501 of this
chapter.
(e) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the specific allegations
contained in the Pre-Penalty Notice must be preceded by a written
letter of representation, unless the Pre-Penalty Notice was served upon
the alleged violator in care of the representative.
Sec. 505.403 Penalty imposition.
If, after considering any written response to the Pre-Penalty
Notice and any relevant facts, OFAC determines that there was a
violation by the alleged violator named in the Pre-Penalty Notice and
that a civil monetary penalty is appropriate, OFAC may issue a Penalty
Notice to the violator containing a determination of the violation and
the imposition of the monetary penalty. For additional details
concerning issuance of a Penalty Notice, see appendix A to part 501 of
this chapter. The issuance of the Penalty Notice shall constitute final
agency action. The violator has the right to seek judicial review of
that final agency action in Federal district court.
Sec. 505.404 Administrative collection; referral to United States
Department of Justice.
In the event that the violator does not pay the penalty imposed
pursuant to IEEPA or make payment arrangements acceptable to OFAC, the
matter may be referred for administrative collection measures by the
Department of the Treasury or to the United States Department of
Justice for appropriate action to recover the penalty in a civil suit
in a Federal district court.
Sec. 505.405 Findings of Violation.
(a) When issued. (1) OFAC may issue an initial Finding of Violation
that identifies a violation if OFAC:
(i) Determines that there has occurred a violation of any provision
of the applicable part of this chapter, or a violation of the
provisions of any regulation, ruling, instruction, order, directive, or
license issued by or pursuant to the direction or authorization of the
Secretary of the Treasury pursuant to the applicable part of this
chapter or otherwise under IEEPA;
(ii) Considers it important to document the occurrence of a
violation; and
(iii) Based on the guidelines contained in appendix A to part 501
of this chapter, concludes that an administrative response is warranted
but that a civil monetary penalty is not the most appropriate response.
(2) An initial Finding of Violation shall be in writing and may be
issued whether or not another agency has taken any action with respect
to the matter. For additional details concerning issuance of a Finding
of Violation, see appendix A to part 501 of this chapter.
(b) Response--(1) Right to respond. An alleged violator has the
right to contest an initial Finding of Violation by providing a written
response to OFAC.
(2) Deadline for response; default determination. A response to an
initial Finding of Violation must be made within 30 days as set forth
in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit
a response within 30 days shall be deemed to be a waiver of the right
to respond, and the initial Finding of Violation will become final and
will constitute final agency action. The violator has the right to seek
judicial review of that final agency action in Federal district court.
(i) Computation of time for response. A response to an initial
Finding of Violation must be postmarked or date-stamped by the U.S.
Postal Service (or foreign postal service, if mailed abroad) or courier
service provider (if transmitted to OFAC by courier), or dated if sent
by email, on or before the 30th day after the postmark date on the
envelope in which the initial Finding of Violation was served or date
the Finding of Violation was sent by email. If the initial Finding of
Violation was personally delivered by a non-U.S. Postal Service agent
authorized by OFAC, a response must be postmarked or date-stamped on or
before the 30th day after the date of delivery.
(ii) Extensions of time for response. If a due date falls on a
Federal holiday or weekend, that due date is extended to include the
following business day. Any other extensions of time will be granted,
at the discretion of OFAC, only upon specific request to OFAC.
(3) Form and method of response. A response to an initial Finding
of Violation need not be in any particular form, but it must be
typewritten and signed by the alleged violator or a representative
thereof (electronic signature is acceptable), contain information
sufficient to indicate that it is in response to the initial Finding of
Violation, and include the OFAC identification number listed on the
initial Finding of Violation. The response must be sent to OFAC's
Enforcement Division by mail, courier, or email and must be postmarked
or date-stamped in accordance with paragraph (b)(2) of this section.
(4) Information that should be included in response. Any response
should set forth in detail why the alleged violator either believes
that a violation of the regulations did not occur and/or why a Finding
of Violation is otherwise unwarranted under the circumstances, with
reference to the general factors affecting administrative action set
forth in the guidelines contained in appendix A to part 501 of this
chapter. The response should include all documentary or other evidence
available to the alleged violator that supports the arguments set forth
in the response. OFAC will consider all relevant materials submitted in
the response.
(c) Determination--(1) Determination that a Finding of Violation is
warranted. If, after considering the response, OFAC determines that a
final Finding of Violation should be issued, OFAC will issue a final
Finding of Violation that will inform the violator of its decision. A
final Finding of Violation shall constitute final agency action. The
violator has the right to seek judicial review of that final agency
action in Federal district court.
(2) Determination that a Finding of Violation is not warranted. If,
after considering the response, OFAC determines a final Finding of
Violation is not warranted, then OFAC will inform the alleged violator
of its decision not to issue a final Finding of Violation.
Note 1 to paragraph (c)(2): A determination by OFAC that a final
Finding of Violation is not warranted does not preclude OFAC from
pursuing other enforcement actions consistent with the guidelines
contained in appendix A to part 501 of this chapter.
(d) Representation. A representative of the alleged violator may
act on behalf of the alleged violator, but any oral communication with
OFAC prior to a written submission regarding the
[[Page 60825]]
specific alleged violations contained in the initial Finding of
Violation must be preceded by a written letter of representation,
unless the initial Finding of Violation was served upon the alleged
violator in care of the representative.
Subpart E--United Nations Participation Act Penalties
Sec. 505.501 Penalties.
(a) Section 5(b) of the United Nations Participation Act, as
amended (UNPA) (22 U.S.C. 287c(b)), provides that any person who
willfully violates or evades or attempts to violate or evade any order,
rule, or regulation issued by the President pursuant to section 5(a) of
the UNPA shall, upon conviction, be fined not more than $1,000,000 or,
if a natural person, be imprisoned for not more than 20 years, or both.
(b) Violations involving transactions described in section
203(b)(1), (3), and (4) of IEEPA shall be subject only to the penalties
set forth in paragraph (a) of this section.
Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2026-19678 Filed 9-24-26; 8:45 am]
BILLING CODE 4810-AL-P
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