OFAC Consolidates Sanctions Penalty Rules
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced a major restructuring of sanctions-related regulations, consolidating existing enforcement procedures and penalty information into a new part of the Code of Federal Regulations.
The announcement was published on September 24, 2026.
OFAC said information concerning enforcement procedures, penalties and the rights of U.S. persons being investigated for potential sanctions violations had previously been distributed across different parts of 31 CFR Chapter V.
Under the new structure, this information is being consolidated into a new Sanctions Penalties Regulations part.
More Than 100 Existing Subparts Affected
Following publication of the new part, OFAC will update other portions of 31 CFR Chapter V to replace existing penalty information with references to the new regulations.
OFAC said the restructuring will result in the deletion of more than 100 subparts from the existing regulatory framework.
The change is intended to reorganize existing regulatory information rather than create a completely separate sanctions regime.
For compliance teams, however, changes to the structure of regulations can still be important because sanctions professionals rely on accurate regulatory references when designing controls, investigating potential violations and documenting compliance decisions.
Changes Related to Syria
OFAC also announced an amendment to the Terrorism List Governments Sanctions Regulations following the rescission of Syria’s designation as a State Sponsor of Terrorism.
As part of the change, OFAC is removing and reserving a Syria-specific general license because the authorization is no longer necessary following the rescission.
This means sanctions professionals handling Syria-related activity will need to pay attention to the updated regulatory framework and applicable authorizations.
Licensing Report Also Published
Alongside the regulatory amendments, OFAC released its quarterly report of licensing activities under the Trade Sanctions Reform and Export Enhancement Act of 2000.
The report covers licensing activity from April through June 2026.
OFAC explained that its TSRA-related regulations provide a specific licensing regime for applications involving exports of agricultural commodities, medicine and medical devices to Iran.
Why This Matters for AML and KYC Professionals
Although the announcement primarily concerns sanctions regulations, it has direct relevance for financial crime compliance teams.
Sanctions screening programs depend on accurate regulatory information. Changes to regulatory references can affect compliance documentation, internal policies, escalation procedures and legal reviews.
Compliance teams should therefore ensure that internal sanctions procedures reference the current regulatory structure rather than relying on outdated CFR references.
KYC and onboarding teams may also need to consider how sanctions-related geographic exposure is assessed when regulatory conditions change.
The development is another reminder that sanctions compliance is not limited to screening customer names against a list. Effective programs also require awareness of regulatory changes, applicable licenses, reporting requirements and restrictions.
Key Takeaways
- OFAC is creating a new Sanctions Penalties Regulations part.
- Existing penalty and enforcement information will be consolidated into the new structure.
- More than 100 subparts are expected to be removed from existing regulations.
- OFAC is also amending Syria-related sanctions regulations.
- Compliance teams should review regulatory references used in sanctions policies and procedures.
Source: OFAC, September 24, 2026.
