On April 24, 2024, President Biden signed into law a significant amendment to the statute of limitations for violations under U.S. sanctions laws, as part of the national security package (H.R. 815). This change extends the period for enforcement actions from five to ten years, reflecting a more robust approach to national security and foreign policy enforcement. Key details of the statute of limitations amendment include:
- IEEPA and TWEA. The statute of limitations has been extended under the International Emergency Economic Powers Act (IEEPA; 50 U.S.C. 1705); and the Trading With the Enemy Act (TWEA; 50 U.S.C. 4315).
- Commencing Proceedings: Under both acts, an action, suit, or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, must not be entertained unless commenced within 10 years after the latest date of the violation upon which the civil fine, penalty, or forfeiture is based. The commencement of such actions includes the issuance of a pre-penalty notice or finding of violation.
- Indictments: For both acts, no person shall be prosecuted, tried, or punished for any offense unless the indictment is found or the information is instituted within 10 years after the latest date of the violation upon which the indictment or information is based.
This amendment not only significantly extends the period during which U.S. authorities can address and penalize sanctions violations, allowing for retrospective action on transactions up to a decade old, but also emphasizes the necessity for businesses to adopt or amend compliance strategies.
In practice, this amendment means that businesses should enhance their recordkeeping and compliance practices to prepare for potential audits that could review up to ten years of transactions and interactions under these laws. Such requirements are poised to notably impact how businesses, especially those involved in international trade and operating in high-risk jurisdictions like Russia and Iran, manage their compliance programs.