Jeremy Paner Breaks Down Recent OFAC Advisory on Sham Transactions

Highlights

• OFAC warns it will scrutinize transactions designed to conceal sanctioned interests
• Companies face enforcement risk for failing to investigate red flags
• Organizations that may touch a sanctioned entity, no matter how indirectly, are at risk of a violation

April 17, 2026

Jeremy Paner discussed a recent advisory from the Office of Foreign Assets Control (OFAC) that signals U.S. authorities will not overlook efforts by sanctioned individuals or entities to conceal their interests through sham transactions with Global Investigations Review.

The advisory notes that sanctioned parties may use intermediaries to “effectuate transfers or establish arrangements that conceal—rather than genuinely extinguish—a continuing interest in property.” The guidance reinforces that OFAC closely scrutinizes transactions, even when connections to sanctioned parties appear remote, and that the enforcement process is rarely clear-cut.

If companies can’t show a clear reason why they haven’t examined or acted upon suspicious transactions, it remains OFAC’s decision whether to issue a violation notice, said Jeremy Paner.

“OFAC isn’t really hiding the ball,” he said. “They’re saying that: ‘If you see red flags in services and you don't do something about it, we’re going to kick your teeth in’.”

“Gatekeepers” like lawyers, trust fund managers, or anyone who can limit or grant access to the U.S. financial system are particularly important to scrutinize, Paner said, adding that the oil, petroleum products and banking sectors should be particularly wary of how complex such transactions can get.

“There have been plenty of instances where even sophisticated companies say, ‘We’ve screened everything, we’ve considered the 50% rule, and there’s no connection to a sanctioned government, so we're going to do this transaction,’” Paner said, referring to the agency interpretation prohibiting companies from dealing with entities that are owned 50% or more by sanctioned individuals or companies.

But it’s never that simple, he said, because the agency has moved beyond issuing penalties for companies in simple cases, like those that fail to cross-reference transactions with parties on the sanctioned entity list. Any company that touches a sanctioned entity, no matter how indirectly, is at risk, he said, adding that OFAC rarely issues hard-and-fast enforcement rules.

“All of this stuff is grey,” he said. “OFAC is very cognizant of not making this all black and white.”

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