Recent US government measures involve a crackdown on North Korean illegal activities, including sanctions that block property interests of sanctioned individuals in the US. Companies must report these interests to OFAC, and all related transactions by US persons are generally prohibited. The sanctions compel organizations to enhance vetting processes, as violations result in strict liability regardless of intent, leading to significant civil fines. Criminal penalties and export privileges risks also apply, with potential implications for foreign organizations as well.
These sanctions draw clear liability boundaries and nudge organizations towards stronger vetting without broad new regulations. A key risk to consider: If a US company unknowingly hires or pays a newly sanctioned contractor, the consequences can escalate quickly. OFAC violations are a strict liability, which means that intent does not matter, and civil fines can run up to significant amounts.
Organizations can also face criminal penalties and loss of export privileges. Since OFAC is a US law with extraterritorial application, foreign organizations may do well to also consider potential exposure.
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