he U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released an online voluntary self-disclosure (VSD) portal for disclosure of potential violations of U.S sanctions earlier this month. The VSD portal will replace the current system, where organizations voluntarily disclose potential violations over email. The VSD portal provides a more secure and user-friendly method of self-disclosure.
OFAC says the improved system will provide a faster acknowledgement of violation submissions and better communication with the agency. While the method of reporting is changing, nothing about the underlying requirements for self-disclosure will change. OFAC continues to offer the potential for a 50 percent reduction in penalties for qualifying self-disclosures.
A VSD is a self-initiated notification to the OFAC of a potential sanctions violation that can earn cooperation credit, should the following OFAC investigation find a violation. Compliance experts warn of the importance of self-reporting, since if caught, there could be severe repercussions like civil penalties (fines of over $1 million for each violation), criminal prosecutions ($20 million in fines for each violation and up to 30 years in prison), and administrative actions, among others.
The main features of the new online portal include the two-step disclosure process and disclosure timeline. The two-step disclosure process includes an initial submission regarding the potential violation which prompts the start of the disclosure timeline, and a final submission which is a detailed report after the completion of the entity’s internal investigation. The disclosure timeline will not change, with OFAC expecting companies to submit a follow-up report within 180 days of the initial notification. Additionally, the new portal allows multiple documents to be filed with OFAC at once efficiently. All other underlying procedures and requirements will stay the same.
The new VSD portal took effect early February. 