Ryan Fayhee


On May 26, 2017 the D.C. Circuit Court of Appeals released its opinion in Epsilon Electronics v. Office of Foreign Assets Control (“OFAC”), a rare appeal of OFAC’s decision in an economic sanctions civil penalty case. The court upheld OFAC’s determination that Epsilon had violated the Iranian Transactions and Sanctions Regulations (“ITSR”). However, the court remanded to OFAC to reconsider the treatment of five “egregious” violations and the overall penalty assessment against Epsilon, citing concerns with the procedure the agency used in making these determinations.

Ending a five-year investigation, ZTE Corp. (“ZTE”), the second-largest producer of telecommunications equipment in China, entered into a plea agreement with the US Department of Justice (“DOJ”) and settlement agreements with the US Department of Commerce’s Bureau of Industry (“BIS”) and the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”), for violations of US sanctions against Iran and US export controls, making false statements to the US government, and obstruction of justice (complete plea/settlement agreements are available at the following links: DOJ, BIS and OFAC). If the criminal plea with the DOJ is approved by a federal judge, the combined $1.19 billion in penalties would be the largest fine and forfeiture ever levied by the US government in an export control case.

The US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the US Department of State’s Directorate of Defense Trade Control (“DDTC”), and the US Department of Commerce’s Bureau of Industry and Security (“BIS”) have announced increases in the maximum civil monetary penalties (“CMPs”) under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“2015 Act”). This statute requires the agencies to make such adjustments annually by January 15 of each year.  These newly adjusted CMPs may be imposed for violations of OFAC sanctions regulations, the International Traffic in Arms Regulations, and the Export Administration Regulations (“EAR”).  Although these are the first annual adjustments made under the 2015 Act, they follow initial “catch-up” adjustments that went into effect on August 1, 2016 and were previously described here

On 7 October 2016, following his prior announcement (see prior blog post here) of the intention to terminate US sanctions targeting Myanmar (also known as Burma), President Obama issued an Executive Order (“the 7 October Executive Order”) terminating US sanctions targeting Myanmar. As a result of this action, the sanctions that previously restricted US Persons (i.e., US citizens or permanent residents, wherever located or employed; entities organized under US law (and their non-US branches); and persons located in the United States) from engaging in certain activities involving Myanmar or specific entities associated with Myanmar are no longer in effect. The US Treasury Department’s Office of Foreign Assets Control (“OFAC”) simultaneously published a Fact Sheet explaining these changes and updated its list of Frequently Asked Questions regarding Myanmar.