Jeremy Paner Breaks Down How Multinationals Should Approach Recent US Sanctions List Removals

Jeremy Paner authored an article for Dow Jones Risk Journal on how multinationals should approach recent U.S. sanctions list removals, including how to handle potential increased exposure to previously sanctioned individuals and companies.

“Absent an OFAC press release providing a summary of the facts the agency relied upon in making its removal determination, multinationals considering potential businesses involving previously sanctioned parties should carefully weigh the totality of the circumstances surrounding those removals,” Paner writes.

According to Paner, OFAC publicly announces its sanctions listings at least weekly, whereas the agency has not issued a delisting press release unrelated to the lifting of an entire sanctions program since late 2019.

“In the absence of explanations for its removals, companies must infer OFAC’s reasoning when considering any potential dealing involving a formerly sanctioned individual or company,” Paner writes. “Those inferences are particularly challenging in the Russia-related sanctions context, because of the divergence of U.S.-Russia relations under Trump.”

Paner also states that assessments of potential dealings with delisted individuals or companies are highly fact-specific, irrespective of the sanctions program.

“Multinationals are significantly more likely to encounter individuals or companies that had in fact engaged in sanctionable transactions or otherwise met certain status-based criteria deemed contrary to the national security and foreign policy interests of the United States,” Paner writes. “OFAC delistings in those cases require a clear articulation of changed circumstances and concomitant ongoing, affirmative commitment to refrain from sanctionable transactions or activities.”

Ultimately, Paner emphasizes that a risk-based approach to sanctions compliance likely requires multinationals to conduct due diligence reviews of purported remediation and obtain attestations regarding the same prior to conducting any business with previously sanctioned persons.

Paner concludes the article by explaining that companies should also consider whether delisted individuals or entities remain subject to U.S. economic sanctions irrespective of the delisting. “Companies considering dealings with delisted persons who remain subject to sanctions should carefully analyze and authenticate any OFAC specific license that purportedly authorizes dealings with sanctioned parties,” Paner writes.

Read the article.