OFAC Reaches Settlement With New York Lobbying Firm for Sanctions Violations
A New York lobbying firm agreed to pay about $12,000 for violations of the Global Terrorism Sanctions Regulations, the Treasury’s Office of Foreign Assets Control said in a Jan. 21 notice. The firm, Park Strategies, LLC, violated U.S. sanctions when it signed a contract and received payments from Al-Barakaat Group of Companies Somalia Limited, which was designated a Specially Designated Global Terrorist by OFAC in 2001. The contract required Park Strategies to provide lobbying services for Al-Barakaat, which were “outside the scope” of authorized activities specified in the Treasury’s general license for legal services.
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Park Strategies signed the binding contract in 2017 despite having “actual knowledge” of Al-Barakaat’s designation as an SDGT, Treasury said. Al-Barakaat agreed to three payments of $10,000 to the firm. About a month after receiving the first payment, Park Strategies asked its bank to place the payment in a “blocked account,” told its “external counsel” to begin an investigation, stopped all activity relating to the contract and voluntarily disclosed the violation to OFAC.
OFAC said the violations constituted a non-egregious case. Aggravating factors included the fact that the lobbying firm knew about the sanctions violations and the fact that the firm’s actions “caused harm to the integrity” of Treasury’s terrorism sanctions. Mitigating factors included the fact that Park Strategies had not committed a violation in the previous five years and took “remedial measures,” including suspending its contract, placing the payments in a blocked account and adopting new screening procedures for future contracts.
The case highlights “important sanctions compliance considerations” for lawyers and other “legal service organizations” who represent blocked people or entities, the notice said. While “most” OFAC sanctions programs have general licenses that authorize certain activities, legal services “not enumerated in such general licenses” require a specific license from OFAC, the agency said. Other “related” activities -- such as “lobbying, public relations, government affairs, consulting, and business development” -- are not legal services and are not covered by the general licenses authorizing certain legal services.
Lawyers, law firms and other legal services organizations “cannot avail themselves of the authorizations” contained in licenses “when engaging in activities that do not fall within the scope of generally or specifically licensed legal services,” OFAC said. The agency is urging lawyers and law firms to “exercise caution and care regarding their sanctions obligations before knowingly engaging with blocked persons.”