September 24, 2020
McGuireWoods Richmond partner Alex Brackett was quoted in a Sept. 11, 2020, Compliance Week story about the recent pact between the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Delaware Department of Justice.
The memorandum of understanding (MOU) aims to improve information-sharing and joint investigation efforts relating to sanctions enforcement and is significant because of Delaware’s prominence in the business community as a state of incorporation.
Historically, Delaware has allowed a fair degree of anonymity in the
incorporation process and the ability to shield beneficial ownership
information, increasing the likelihood that foreign individuals and
entities will use a Delaware-incorporated entity to evade sanctions,
facilitate money laundering or otherwise conceal illegal conduct.
According to Brackett, a partner in the firm’s Government Investigations & White Collar Litigation Department, OFAC and Delaware law enforcement now have a framework to more easily facilitate information exchange. This pact is consistent with steps Delaware has taken over the past few years to strengthen its role in the policing of sanctions issues, he said, as well as with similar agreements into which OFAC has entered in recent years with various state and federal financial regulators.
“This kind of collaboration has the potential to serve, to at least some extent, as a force multiplier for OFAC, an agency whose resources are often stretched thin,” he said.