... ones that are subjected to the greatest burden in terms of fines, and thus the political risk associated with sanctions is the most pronounced for them. The purpose of the article is to fill in this gap in the literature.
Study Design
The imposition of sanctions by the U.S. Department of the Treasury and its Office of Foreign Assets Control (OFAC) is extensively
regulated
by 2009 guidelines that set several important parameters. First, the amount of the fine depends on the volume of transactions. Second, it is influenced by a number of aggravating and mitigating circumstances, the key ones ...
... to find fault with even small things and non-obvious episodes.
It should be said that the Department of the Treasury itself has done a lot of work to generalize the record of its investigations against violators. The Office of Foreign Assets Control (OFAC) has issued basic recommendations for companies, corporations and other organizations on how to control sanctions risks and
develop corporate regulatory fitness programs
. The document analyzes in detail the typical mistakes committed by businesses and gaps in the managerial structure that lead to violations. The US authorities have compensated their hair-splitting ...
... classification regarding their size or sophistication. Ten cases out of 205 account for individuals, and the other 195, for entities.
Testing Hypothesis 1.
The first important variable to test Hypothesis 1 is willfulness of a person’s behavior to violate sanctions program. OFAC classified 32 of 205 cases as a willful violation, which accounts for 16% of all cases. Only in five cases OFAC assessed the behavior as unwilful. However, in most observations the cases were not classified, which may mean that OFAC does not consider ...
