OFAC consolidates all sanctions civil penalty rules in new Part 505

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has consolidated the civil penalty rules scattered across its economic sanctions programs into a single new regulation, 31 CFR Part 505, the Sanctions Penalties Regulations. The final rule was published in the Federal Register of 25 September 2026 and is effective the same day. It carries the official reference FR Doc. 2026-19678 and regulatory identification number RIN 1140-AA51.

The rule reproduces, in one place, enforcement procedures and penalty provisions that until now sat in individual parts of 31 CFR chapter V. OFAC states that no substantive changes are being made to its sanctions programs, and that it will subsequently update the individual program parts to cross-reference the new text. The document is signed by Bradley T. Smith, Director of the Office of Foreign Assets Control, and appears at Vol. 91, No. 185, pages 60821 to 60825.

A single rulebook for every sanctions program

The new part is organised into five subparts:

• Subpart A sets out the relation of the part to other laws and regulations, the civil penalty information OFAC releases to the public, and the Paperwork Reduction Act notice.
• Subpart B contains the definitions of IEEPA and OFAC used throughout the regulation.
• Subpart C is reserved.
• Subpart D covers International Emergency Economic Powers Act (IEEPA) penalties and Findings of Violation.
• Subpart E covers penalties under the United Nations Participation Act (UNPA).

Substantive prohibitions, definitions, interpretations and licences remain in the part dedicated to each individual sanctions program and on OFAC’s website.

The money: up to $377,700 per violation

Under Subpart D, IEEPA provides for a maximum civil monetary penalty of the greater of $377,700 or twice the value of the transaction that is the basis of the violation. The amount is adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. Criminal exposure is also restated: a person who willfully commits, attempts, conspires to commit, or aids and abets a violation may, upon conviction, be fined not more than $1,000,000 or, if a natural person, imprisoned for not more than 20 years, or both.

OFAC also lists the additional statutes under which it may levy civil penalties:

• The Trading with the Enemy Act, penalties at 31 CFR 501.700 through 501.747.
• Section 2339B of the Antiterrorism and Effective Death Penalty Act of 1996, penalties at 31 CFR 597.701 through 597.705.
• The Foreign Narcotics Kingpin Designation Act, penalties at 31 CFR 598.701 through 598.706.
• The Clean Diamond Trade Act, penalties at appendix A to 31 CFR part 501.

Procedure, disclosure and the 30-day clock

Subpart D also standardises the enforcement sequence, from the issuance of a Pre-Penalty Notice to final agency action. An alleged violator has the right to respond in writing within 30 days; failure to respond is deemed a waiver. A Penalty Notice constitutes final agency action and may be challenged in Federal district court. Unpaid penalties may be referred for administrative collection or to the Department of Justice for recovery in a civil suit. OFAC may alternatively issue an initial or final Finding of Violation where it considers documentation of the violation important but a monetary penalty is not the most appropriate response.

On transparency, OFAC must publish civil penalty information on its website not less frequently than monthly, including the name and location of an entity involved, the sanctions program, a description of the violation, whether the case ended in a settlement or a penalty, whether the entity voluntarily self-disclosed, and the amount imposed. For proceedings against individuals, only aggregate figures are released, and the names of individual violators are withheld.

The rule was issued without notice and comment, on the grounds that it involves a foreign affairs function, makes no substantive changes and constitutes a rule of agency procedure. OFAC also states that willful violations may be criminal, citing Executive Order 14294 of 9 May 2025 on overcriminalisation in Federal Regulations, and that the statutory authority for criminal liability requires willfulness under 50 U.S.C. 1705(c).

The consolidation matters because it removes the need to hunt through dozens of program-specific parts to find the applicable penalty ceiling and procedure. Banks, exporters, freight forwarders and compliance teams now have one reference point for what OFAC can impose, how a case proceeds and what the agency must disclose — with the $377,700 figure and the 30-day response deadline as the two numbers most likely to shape internal escalation policies.

Source: Federal Register, Vol. 91, No. 185, 25 September 2026, Rules and Regulations, p. 60821 (official reference: FR Doc. 2026-19678).