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Law360 (April 20, 2020, 8:22 PM EDT) -- The U.S. Department of the Treasury told companies on Monday that it "understands" they may be running into issues covering their compliance bases amid the global pandemic and that if a shift in resources leads to a violation, the government will take that into account in any eventual enforcement.
The department's Office of Foreign Assets Control issued a statement on Monday encouraging companies to continue taking a risk-based approach to complying with U.S. sanctions, which may mean shifting resources to account for difficulties that arise because of the novel coronavirus.
OFAC, which enforces the various U.S. sanctions programs by fining violators, said that it "understands" companies may be "facing technical and resource challenges" because of the pandemic. As such, companies may respond by "reallocating" sanctions compliance resources.
If such a move is part of a risk-based approach, OFAC said it will "evaluate this as a factor in determining the appropriate administrative response to an apparent violation that occurs during this period."
OFAC also encouraged those who may be having trouble meeting filing deadlines because of the pandemic to alert the appropriate contact at the office.
Alexis Coll-Very, a partner at Goodwin Procter LLP who advises companies on government enforcement, saw the move as a positive one in that it recognized the difficult realities that companies are facing.
However, Coll-Very also took note of the fact that OFAC said it would consider the pandemic a factor on a "case by case" basis in future potential enforcement actions. "It is going to be, as all these things are, retrospective," she said.
"The advice I would give to a company that is considering reallocating resources as a result of COVID-19 is that they document it. It will show that it was part of a risk assessment and that the decision to reallocate was made thoughtfully," Coll-Very said.
Last week, OFAC released guidance for companies seeking to provide humanitarian relief while navigating U.S. sanctions on Iran, the Ukraine and other countries.
--Editing by Michael Watanabe.
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