The United States has comprehensive sanctions and anti-money laundering (AML) regulatory regimes that are enforced by a number of government organizations. In recent years, companies and financial institutions have been under increased scrutiny to have adequate compliance programs to prevent money laundering, fraud, and other illicit financial transactions.

The U.S. governmental organizations that enforce U.S. sanctions and AML regimes include the Department of Justice (DOJ), Office of Foreign Assets Control (OFAC), Financial Crimes Enforcement Network (FinCEN), Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), and Commodity Futures Trading Commission (CFTC).

The Bank Secrecy Act (BSA) establishes requirements for companies to maintain records and file reports to help prevent money laundering, terrorist financing, and other fraudulent activities. It creates an affirmative requirement for financial institutions to establish AML compliance programs.

Violations of U.S. sanctions regulations can result in civil or criminal liability. Criminal penalties can be brought by the DOJ when violations are willful. Both U.S. persons and non-U.S. persons can be subject to U.S. sanctions. Non-U.S. persons are prohibited from “causing” or “conspiring to cause” U.S. persons to violate U.S. sanctions.

Sanctions can be classified as either comprehensive or selective. Comprehensively sanctioned jurisdictions include Crimea, Cuba, Iran, North Korea, and Syria. Selective sanctions target specific individuals or entities. For example, OFAC maintains a list of blocked persons on a Specially Designated Nationals (SDN) List.

In 2024, TD Bank agreed to pay over $3 billion in penalties to the U.S. government to settle money laundering charges. TD Bank pleaded guilty to having inadequate compliance programs and deficient transaction monitoring systems. TD Bank also was accused of failing to file accurate Currency Transaction Reports (CTRs) and choosing “profits over compliance in order to keep its costs down.”

In 2023, the cryptocurrency exchange Binance was required to pay an over $4 billion penalty to the U.S. government for failing to report a number of suspicious transactions. Since its inception, Binance failed to fail Suspicious Activity Reports (SARs) despite awareness of transactions involving sanctioned persons on the SDN List as well as money going to comprehensively sanctioned jurisdictions.

U.S. sanctions and AML regimes also impact non-U.S. companies. In 2023, OFAC determined that British American Tobacco engaged in a scheme that caused U.S. financial institutions to process payments with a company in North Korea. British American Tobacco had created a joint venture with a company North Korea to facilitate cigarette manufacturing operations in the country. Over the course of 7 years, approximately $250 million of profits were sent to U.S. financial institutions from the North Korean joint ventures through a web of intermediaries. British American Tobacco had to pay a $500 million penalty to OFAC to settle the case.

In 2021, Capital One was required to pay a $390 million penalty to FinCEN for failing to file thousands of CTRs and SARs. This failure to file the required reports was despite knowledge of transactions and customers engaged in organized crime, tax evasion, and fraud. For example, Capital One had been aware of illicit financial activity associated with a Genovese organized crime family and still continued to process payments for the family’s business.

The variety of enforcement actions in recent years reinforces the importance of having adequate compliance programs in place to monitor risks and prevent potential violations of U.S. sanctions and AML regulations.