Sanctions Penalties Regulations

What it does

• •OFAC creates a new consolidated regulation (31 CFR Part 505) that compiles penalty provisions previously scattered across multiple sanctions program regulations.
• •Establishes the civil penalty process for violations of the International Emergency Economic Powers Act (IEEPA), including pre-penalty notice, settlement procedures, and final agency action, with penalties up to the greater of $377,700 or twice the transaction value.
• •Sets forth penalty procedures for violations of the United Nations Participation Act (UNPA) and specifies that OFAC will publicly release information about concluded civil penalty proceedings and settlements on a monthly basis.
• •Clarifies that willful violations of the regulations may result in criminal penalties under 50 U.S.C. 1705, requiring proof of willfulness as a mens rea element.

Why it matters

• •Consolidating penalty provisions into one regulation standardizes enforcement procedures across multiple OFAC sanctions programs and facilitates compliance with the Federal Civil Penalties Inflation Adjustment Act, which requires annual inflation adjustments.
• •Public disclosure of settlement amounts and violation details increases transparency regarding OFAC enforcement actions and allows entities to understand penalty patterns.
• •The regulation clarifies OFAC's consideration of factors such as willfulness, awareness, harm to sanctions objectives, and voluntary self-disclosure (which halves base penalties) in determining penalty amounts.

Who is affected

• •U.S. persons and entities subject to OFAC sanctions enforcement, including banks, businesses, and individuals engaged in transactions regulated under IEEPA and UNPA.
• •Foreign governments, individuals, groups, and entities designated as targets of U.S. economic sanctions programs administered by OFAC.
• •The general public, through monthly publication of settlement and penalty information on OFAC's website.

What happens next

This final rule is effective September 25, 2026, and OFAC will subsequently update other 31 CFR chapter V sections to cross-reference these consolidated penalty regulations rather than duplicating penalty language in individual program regulations.