On July 22, 2024, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued guidance relating to OFAC’s implementation of the 21st Century Peace Through Strength Act (“Act”), included in H.R. 815 and signed into law on April 24, 2024, which extended the statute of limitations for civil and criminal violations of the International Emergency Economic Powers Act (“IEEPA”) and the Trading with the Enemy Act (“TWEA”) from five to 10 years. Together, the IEEPA and TWEA provide the statutory authority for a wide range of sanctions programs administered by OFAC, including the Iranian Transactions and Sanctions Regulations, Cuban Assets Control Regulations, and Russian Harmful Foreign Activities Sanctions Regulations. OFAC’s guidance is linked here and our prior blog post on the Act is linked here.
Under the guidance:
- OFAC advises that the 10-year statute of limitations applies to any violation that was not time-barred at the time of the Act’s enactment—i.e., April 24, 2024.
- As applied, OFAC may commence an enforcement action (e.g., via a pre-penalty notice or finding of violation as provided under the Act) for civil violations of the IEEPA- or TWEA-based sanctions programs within 10 years of the latest date of the violation if such date was after April 24, 2019.
- OFAC anticipates publishing an interim final rule to extend the recordkeeping requirements governing the relevant OFAC sanctions programs from five years to 10 years, which OFAC anticipates would become effective six months after publication of the rule.
Notably, OFAC’s guidance does not comment on the implications of the Act’s statute of limitations extension as applied to criminal enforcement. It is likely that the US Justice Department will adopt the same approach in criminal enforcement of potential IEEPA and TWEA violations to avoid unconstitutional retroactive effect of the Act on activity that would otherwise have been time-barred at the time of the Act’s enactment.
Author
Bart M. McMillan
Mr. McMillan's practice involves compliance counseling; compliance programs; licensing; compliance reviews; internal investigations; voluntary disclosures; administrative enforcement actions; criminal investigations; customs inquiries, audits, detentions, and seizures; and trade-compliance due diligence and post-acquisition integration in mergers and acquisitions. His practice includes matters that implicate the US International Traffic in Arms Regulations (ITAR), US Export Administration Regulations (EAR), US National Industrial Security Program (NISP), the US Committee on Foreign Investment in the United States (CFIUS), and equivalent non-US laws. Mr. McMillan regularly advises on and represents clients in matters involving technology, including its control, protection, accidental disclosure, diversion, or unauthorized collection.
Mr. McMillan has extensive experience working with companies in the aerospace and defense industry, as well as companies in the Middle East and other parts of Asia.
Author
Rob O'Brien
Rob assists multinational companies on OFAC sanctions, export controls, and other trade laws in the context of compliance, licensing, internal investigations, mergers and acquisitions, government disclosures, and enforcement actions.
He has experience assisting clients navigate sanctions and export control in the following sectors: semiconductor design and manufacturing, telecommunications, pharmaceuticals, consumer goods, and financial services. Rob has also assisted start-ups and medium-sized businesses encountering OFAC sanctions and export controls for the first time.
Rob's pro bono practice includes providing sanctions and export control advice to a global NGO providing humanitarian relief in conflict zones. He also advises a global pro-bono law firm in advocacy matters relevant to sanctions and export controls. He has also served on the board of directors of a nonprofit working to improve the mental health environment for university students.
