Recent Economic Sanctions Enforcement Actions Signal Trump Administration Priorities and the Importance of Cooperation

The U.S. government continues to sharpen its economic sanctions enforcement focus on financial actors that facilitate illegal cross-border capital flows while also rewarding companies that proactively remediate non-compliance. Within days of one another, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the Department of Justice’s (“DOJ’s”) National Security Division announced two headline enforcement outcomes that illustrate both ends of the enforcement spectrum: punitive action for willful non-compliance and leniency for prompt, fulsome self-disclosure and remediation.

First, on June 12, 2025, OFAC imposed the statutory-maximum civil penalty of $215,988,868 on San Francisco-based venture capital firm GVA Capital Ltd. (“GVA Capital”) for managing blocked investments on behalf of Russian oligarch Suleiman Kerimov, and for failing to comply with an OFAC administrative subpoena for more than two years.

Second, on June 16, 2025, DOJ announced its decision to not prosecute private-equity sponsor White Deer Management LLC (“White Deer”) and its management vehicles after they voluntarily self-disclosed sanctions and export-control violations by a portfolio company it acquired, Unicat Catalyst Technologies LLC (“Unicat”). DOJ credited White Deer’s timely disclosure, cooperation, and remediation as the basis for declining prosecution, and Unicat agreed to pay $4 million to settle potential civil liability with OFAC, DOJ, and the Department of Commerce’s Bureau of Industry and Security (“BIS”).

Together, both actions underscore the U.S. government’s expectation that companies involved in global trade and investment, as well as financial intermediaries, implement robust risk-based controls to detect sanctioned counterparties and remediate promptly when compliance gaps are discovered.

GVA Capital

GVA Capital managed investments for Russian oligarch Suleiman Kerimov—even though such services were prohibited when Kerimov was placed on OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) list in 2018 because of his status as a Russian government official. As a result of this designation, Kerimov’s property and property interests in the United States were blocked and could not be managed without OFAC’s authorization.

GVA continued to provide a broad array of services after Kerimov’s designation. GVA Capital management personally courted Kerimov at his French estate, accepted $20 million from a Guernsey-based entity in which he held an interest, transferred it into a Delaware-based special purpose vehicle established to hold and dispose of investments, and continued to manage—and attempt to liquidate—those interests even after Kerimov’s April 2018 designation. To that end, GVA Capital executed an “assignment and adherence” agreement in December 2018 transferring blocked interests among entities within the Kerimov-held entities and, on three separate occasions (2019, 2020, and 2021), attempted either to sell or to distribute in-kind shares in a U.S. company for Kerimov’s benefit.

GVA Capital’s tepid cooperation was a major factor in the large fine. In response to OFAC’s administrative subpoena in June 2021, GVA Capital produced only 173 responsive documents and indicated that its response to the subpoena was complete. However, after OFAC issued a pre-penalty notice in September 2023, GVA Capital subsequently produced 1,300 responsive records and re-certified its response as complete—more than two years after the initial production and certification. OFAC deemed GVA Capital’s conduct “egregious” and treated each of the 28 months of non-compliance with the subpoena as 28 separate violations of its reporting obligations.

In calculating the statutory maximum civil penalty, OFAC cited two primary aggravating factors: (1) GVA Capital’s willful violations despite receiving legal advice in May 2018 warning that further transactions involving Kerimov would be prohibited, and (2) the firm’s facilitation of a sanctioned individual’s access to the U.S. financial system, thereby undermining U.S. foreign-policy objectives. OFAC acknowledged that GVA Capital had no prior violations but nonetheless declined to mitigate on that basis given the seriousness of the conduct.

White Deer/Unicat

On the other end of the enforcement spectrum, DOJ issued a non-prosecution letter to White Deer and its affiliates on December 19, 2024 despite Unicat’s violations of multiple export and sanctions laws. According to DOJ’s letter, Unicat’s founder and former CEO caused Unicat to sell chemical catalysts used in oil refining and steel production a total of 23 times to customers in Iran, Venezuela, Syria, and Cuba in violation of economic sanctions laws. Unicat further issued false statements in export documents and other records to conceal the identities and locations of its customers.

After White Deer and its affiliates discovered Unicat’s misconduct post-acquisition, they immediately ceased a pending Iranian transaction, promptly retained counsel to conduct an internal investigation, and submitted a voluntary self-disclosure upon determining that Unicat’s actions violated U.S. economic sanctions and export laws.

The National Security Division declined to pursue charges after concluding that White Deer’s voluntary self-disclosure satisfied every element of the Mergers & Acquisition Policy applicable to voluntary self-disclosures. More specifically, DOJ credited White Deer with: (1) completing a bona fide, lawful purchase of Unicat; (2) having no pre-existing duty to report the legacy misconduct they later uncovered; (3) making a disclosure that was timely in context—namely, within three months of closing a second, related acquisition, despite COVID-19 delays and only one month after the misconduct surfaced during post-acquisition integration, while simultaneously cancelling a pending Iran transaction that posed an imminent national-security risk; (4) providing “exceptional and proactive” cooperation by divulging all known facts in identifying and producing records held on employees’ personal devices and maintained abroad; and (5) completing robust remediation within a year, including terminating culpable personnel, disciplining others, and installing an effective compliance and internal-controls program.

DOJ’s decision not to prosecute White Deer is the first time, since the Department adopted its Mergers and Acquisitions Policy in March 2024, that it has declined to bring charges against an acquiring company that voluntarily disclosed the criminal conduct of a business it purchased. 

On the civil side, Unicat entered into a global settlement with OFAC, DOJ, and BIS of $3,882,797, which accounted for a civil forfeiture to DOJ of $3,325,052.10, a sanctions civil monetary penalty to OFAC of $3,882,797, and a sanctions and export civil monetary penalty to BIS of $391,183 (which each agency credited against the other). Although OFAC’s maximum civil monetary penalty exceeded $8 million, OFAC credited Unicat’s voluntary self-disclosure of apparent violations the agency considered to be “egregious” and its subsequent cooperation and remediation. Additionally, OFAC cited Unicat’s lack of penalty notices or findings of violation in the five years preceding the transactions, its agreement to toll the statute of limitations, its termination of Unicat’s former CEO, its implementation of a comprehensive economic sanctions compliance program (with designated compliance managers, periodic audits, employee training, and contract revisions), and a company-wide commitment to a culture of compliance.

Key Takeaways

The GVA Capital penalty stresses the importance of not relying on “formalistic ownership arrangements that obscure the true parties in interest.” In its enforcement release, OFAC emphasized that “gatekeepers”—such as investment professionals, accountants, attorneys, and trust and corporate formation service providers—are in a better position than others to identify whether blocked persons retain an interest in property in violation of OFAC regulations. The agency thus expects non-bank financial institutions to have a “clear understanding” of their regulatory obligations, and the failure to produce records timely can itself trigger separate violations and significant penalties.

At the same time, the White Deer non-prosecution illustrates that companies can, under certain circumstances, escape criminal charges if, upon discovering misconduct, they make a timely and comprehensive voluntary self-disclosure, cooperate in good faith, and actively work to remediate the violation. It is a reminder of the powerful incentives for companies to embed rigorous sanctions diligence and integration protocols, and to treat early detection and fulsome disclosure as integral elements of ongoing risk management.

Looking Ahead

Companies operating globally and financial institutions—particularly venture capital firms, private funds, wealth-management advisers, and trust administrators—should assess whether their existing compliance frameworks align with OFAC’s expectations. This includes, among others, implementing procedures to identify ultimate beneficial owners, conducting periodic KYC refreshes, and performing thorough sanctions screening. These investigations originated under the Biden Administration but the substantial penalties are consistent with the Trump Administration’s stated priorities of vigorously targeting economic sanctions evasion and other acts that compromise national security. [Our previous alerts regarding Trump Administration priorities can be found here and here.]

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Greta L. Nightingale, an O’Melveny partner licensed to practice law in the District of Columbia; David N. Kelley, an O’Melveny partner licensed to practice law in Connecticut and New York; Mark A. Racanelli, an O’Melveny partner licensed to practice law in New York; Jim Bowman, an O’Melveny partner licensed to practice law in California; David J. Ribner, an O’Melveny partner licensed to practice law in the District of Columbia and New York; Sid Mody, an O’Melveny partner licensed to practice law in Texas; and Juan Antonio Solis, an O’Melveny associate licensed to practice law in Texas, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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