OFAC Intensifies Sanctions Evasion Scrutiny, DOJ Shifts Focus to Trade Compliance

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has issued a significant advisory, “Guidance on Sham Transactions and Sanctions Evasion,” to address the growing risk of sanctions evasion through deceptive practices. This guidance, published on March 31, 2026, and highlighted by ST&R: International Trade Law & Policy and Akin Gump, aims to help companies identify and mitigate risks associated with transactions designed to conceal the interests of blocked persons.

OFAC defines sham transactions as those where sanctioned individuals or entities, often using proxies, maintain a hidden interest in property rather than genuinely relinquishing it. The advisory provides a non-exhaustive list of critical ‘red flags’ for businesses to consider. These include commercially unreasonable transactions, transfers of property to family members or close associates, unclear purposes for transfers, unduly complex corporate structures, continued involvement of a blocked person in the property or business, transfers occurring near the time of a sanctions designation, and evasive responses to inquiries about transactions. If a blocked person retains any interest in property, OFAC emphasizes that it must be blocked and reported.

This heightened focus on sanctions evasion aligns with a broader shift in enforcement priorities within the U.S. Department of Justice (DOJ). According to BDO USA, compliance leaders are observing a significant reorientation, with the mantra ‘Trade is the new FCPA’ (Foreign Corrupt Practices Act) gaining prominence. There’s a notable shift in enforcement emphasis from export processes to import processes, accompanied by a sharp rise in civil matters under the False Claims Act (FCA).

The FCA presents a rapidly escalating concern for trade compliance due to its extensive ten-year lookback period and powerful remedies. Companies can face civil liability for non-compliance even without an intent to defraud, and liability can extend beyond the importer of record. Whistleblowers are identified as a primary source of these cases, underscoring the need for robust internal controls and ethical conduct. Top trade-related risk areas include false country of origin declarations, misclassification of goods, and undervalued goods.

The business impact of these developments is substantial. Companies must integrate OFAC’s red flags into their sanctions compliance policies and conduct thorough due diligence to avoid inadvertently facilitating sanctions evasion. Furthermore, the increased DOJ scrutiny under the FCA necessitates a comprehensive review of trade compliance programs, particularly regarding import processes. Companies that proactively self-disclose violations, demonstrate credible compliance programs, and cooperate with authorities may receive more favorable treatment from the DOJ. The evolving regulatory landscape demands a proactive and sophisticated approach to trade compliance to mitigate significant financial and reputational risks.