OFAC Aggravating Factor Glossary Part 1

Core terms for the circumstances that increase an OFAC penalty, and the factors that reduce it.

TL;DR

TL;DR: An aggravating factor is a circumstance that increases an OFAC civil penalty, such as willfulness or concealment. A mitigating factor, such as a strong compliance program, reduces it.

What aggravating and mitigating factors are

When OFAC calculates a penalty, it starts from a base amount and adjusts for the facts of the case. Aggravating factors push the penalty up: willful or reckless conduct, concealment, management-level involvement, a weak compliance program, and a pattern of violations. Mitigating factors push it down: voluntary self-disclosure, cooperation, a strong compliance program, and remedial action. The difference between the two can swing a penalty dramatically around the starting point of $356,000 per violation.

Why it matters for agent payments

For an agent payment system, the aggravating and mitigating factors are mostly decided by design. Skipping screening or ignoring a flag looks like willfulness or reckless conduct, which aggravates. Building screening into every payment, and keeping a record of each clean or flagged decision, demonstrates a strong compliance program, which mitigates. The sanctionsai.dev 4-Gate protocol, SCREEN, SCORE, STOP, STAMP, leaves exactly that audit trail on every transaction.

Terms covered in Part 1

• Aggravating factor: a fact that increases the penalty.
• Mitigating factor: a fact that reduces the penalty.
• Self-disclosure: voluntarily reporting a violation to OFAC.