On March 6, 2024, the US Department of Justice (“DOJ”), Department of Commerce’s Bureau of Industry and Security (“BIS”), and Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) jointly issued a compliance note titled “Tri-Seal Compliance Note: Obligations of foreign-based persons to comply with US sanctions and export control laws” (“Tri-Seal Compliance Note“). This note highlights longstanding US sanctions and export controls that apply to non-US companies and individuals as well as the risks of non-compliance by non-US parties. The Tri-Seal Compliance Note addresses legal exposure beyond US persons, addressing how those who violate applicable sanctions or engage with sanctioned entities will be held accountable. This publication follows a Tri-Seal Compliance Note issued in July 2023, which addressed voluntary self-disclosure (see our related blog post here), and one issued in March 2023, which addressed Third-Party Intermediaries and Russia-Related Sanctions (see our related blog post here).
The Tri-Seal Compliance Note serves as a resource for non-US companies and individuals, outlining sanctions and export control requirements and potential consequences for non-compliance. These consequences can be severe, including substantial financial penalties, criminal charges, and even being barred from doing business with the United States. This action reflects the US Government’s focus on strengthening the extraterritorial reach of its sanctions and export control regimes.
To extent they have not already, companies should carefully review the Tri-Seal Compliance Note and assess their potential exposure under US sanctions and export controls. In this note, the US Government recommends a “risk-based approach to sanctions compliance by developing, implementing, and routinely updating a sanctions compliance program.” The Tri-Seal Compliance Note also emphasizes the importance of robust internal controls for managing risks, recommending that companies establish “strong internal controls to govern payments and the movement of goods involving affiliates, subsidiaries, agents or other counterparties.”
