Congress Extends Sanctions Statute of Limitations And Addresses Other National Security Issues

On April 24, 2024, President Biden signed into law a sweeping national security legislative package that included the 21st Century Peace Through Strength Act, which includes measures to promote sanctions and export controls enforcement and focuses on China trade.

The Act:

  • Increases the statute of limitations for civil and criminal violations of U.S. sanctions programs from five to 10 years;
  • Targets the Chinese government’s alleged evasion of U.S. sanctions on Iranian petroleum products and involvement in related financial transactions by directing the imposition of sanctions;
  • Directs the President to impose sanctions aimed at curbing China’s alleged involvement in fentanyl trafficking and calls for forthcoming guidance for financial institutions in filing related SARs; and
  • Prohibits foreign adversary controlled applications, including TikTok, ByteDance, in China, Russia, Iran or North Korea.

The Act amends the statute of limitations for International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) to ten years in response to OFAC’s request for additional time to complete, complex, cross-border prosecutions. This new SOL will eliminate the need for OFAC (and DOJ) to obtain tolling agreements with subjects of investigations.

The Act includes provisions requiring reports from the State Department and Commerce Department on technologies in which the Chinese military apparatus is invested and related implications for U.S. national security. Congress also requests information about U.S. investment and role in developing new technologies in China with military use applications. 

The Act further targets sanctions and prosecution of foreign persons who own or operate vessels, refineries or foreign ports engaged in transactions involving Irani petroleum. The Act targets Chinese companies participating in evasion schemes involving Iran petroleum. Further, the Act authorizes OFAC to impose additional recordkeeping requirements and prohibitions on opening certain accounts for financial institutions.

While the Act extends the statute of limitations for violations occurring after the date of enactment, April 24, 2024, there are still questions about retroactive application to existing civil investigations.  The new 10 year limitation will apply to criminal cases occurring after the April 24, 2024 enactment date.

Also, to match the new statute of limitations, regulatory agencies (State, Commerce and Treasury Departments) will probably increase record-keeping retention requirements from 5 to 10 years. The Bank Secrecy Act and OFAC each maintain a five-year record-keeping requirement.  The Treasury Department (FinCEN) and OFAC should increase relevant record-keeping requirements from 5 years to 10 years.

The Act reflects DOJ’s focus on national security issues and, specifically, its Disruptive Technology Strike Force aimed China’s development of sensitive information technologies.  As trade restrictions against China are tightened, DOJ expects to focus prosecutions in this area,.

Finally, the Act focuses on the scourge of fentanyl trafficking and pushes financial institutions to identify red flags and file SARs indicative of possible international fentanyl trafficking operations.  DOJ has been aggressively prosecuting companies involved in the sale of precursor chemical and is increasing related money laundering prosecutions.  The Act directs FinCEN to issue guidance to financial institutions on fentanyl activities and filing of SARs. 

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1 Response

  1. June 7, 2024

    […] ·       Congress Extends Sanctions Statute of Limitations And Addresses Other National Security Issues (Corruption, Crime and Compliance) […]