The Office of Foreign Assets Control has focused on sanctions risks in mergers and acquisitions...

Sanctions and Compliance Domains outline that OFAC has explicitly emphasized the importance of pre- and post-acquisition sanctions due diligence in mergers and acquisitions. OFAC has pursued enforcement actions against companies that failed to conduct adequate sanctions due diligence or did not integrate compliance controls after acquiring foreign subsidiaries.

OFAC’s enforcement history shows cases in which companies inherited violations because they continued business through acquired entities that were already engaged in sanctioned conduct. OFAC clearly identifies failure to conduct sufficient sanctions due diligence as grounds for enforcement. It does not merely “consider” such actions, nor has it issued joint SEC guidance to warn about MandA sanctions risks. OFAC also does not discourage mergers and acquisitions; instead, it stresses compliance integration and strong due diligence.

References from Sanctions and Compliance Domains:

OFAC expectations for sanctions due diligence in mergers and acquisitions.

Enforcement actions taken for failure to conduct adequate pre-acquisition and post-acquisition compliance reviews.

Compliance requirements for inherited liabilities through acquired subsidiaries.