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OFAC Enforcement & Designations Update August 2026

On August 12, the Office of Foreign Assets Control (OFAC) announced a civil enforcement action involving a $60,764 settlement with Rice Lake Weighing Systems, Inc.  Though modest in dollar terms (like the FTI Consulting settlement on June 1, 2026), this action highlights a pointed common lesson: you cannot do indirectly what you are prohibited from doing directly, and OFAC will look through formal structure to the economic reality of a dealing.

The quiet civil docket contrasts sharply with a heavy, fast-moving designation calendar. Over the same period OFAC ran a renewed Iran “maximum pressure” campaign (reinstating oil sanctions and designating shipping, financial, and IRGC weapons-procurement networks), designated 50-plus cartel-linked persons in a major Cartel de Jalisco Nueva Generación (CJNG) action, and pursued Cuba, Venezuela, counter-terrorism, and non-proliferation actions, while continuing a sanctions-list modernization effort that removed dozens of aged or defunct listings.

For compliance teams, the through-line is that indirect exposure, i.e., third-country distributors, intermediary payment structures, and foreign subsidiaries, is where the risk now sits, and that the screening universe is shifting week to week.

Rice Lake Weighing Systems, Inc. (August 12, 2026)

Conduct

Rice Lake, a Wisconsin manufacturer of weighing equipment, acquired the Italian company Dini Argeo S.r.l. in 2016. After the U.S. withdrew from the JCPOA[1] and OFAC revoked General License H in 2018, Dini, as a U.S.-controlled foreign entity, could no longer sell to Iran directly or indirectly. Rice Lake sent a brief, untranslated email flagging the prohibition but provided no practical guidance or monitoring.

Dini stopped selling directly to Iran but continued indirect sales: between June 2019 and November 2021 it filled eight orders (~$121,527) for a UAE distributor, knowing the goods were destined for the Iranian end-user Pandtec. Red flags included direct emails from a Pandtec employee and Iran references in signature blocks. After a late-2021 tip, Rice Lake investigated, halted the sales, voluntarily self-disclosed, and remediated.

Penalty Analysis

Because the matter was voluntarily self-disclosed and non-egregious, the base penalty was one-half of the transaction value, $60,764, and OFAC settled at the base with no uplift. Aggravating factors included reckless disregard for the indirect-sales prohibition; knowledge (or reason to know) of the Iranian destination; and commercial-grade goods benefiting Iran’s economy over two-plus years. However, mitigating factors included a clean five-year history, immateriality, and prompt, counsel-led remediation.

That remediation was not limited to stopping the specific sales at issue: counsel helped structure a broader corrective program that included targeted subsidiary training on U.S. sanctions obligations, enhanced distributor and end-user vetting for diversion risk, clearer escalation procedures for Iran-related red flags, and reexport-control warnings on invoices and other commercial documents.

The counsel-led nature of the response is important because sanctions remediation often requires more than an operational fix: experienced counsel can assess whether conduct is reportable, preserve privilege over sensitive fact development, calibrate voluntary self-disclosure and tolling decisions, align remedial steps with OFAC’s enforcement expectations, and create a documented record showing that management treated the issue as a legal and compliance priority rather than a one-off business interruption.

OFAC also credited Rice Lake’s strong cooperation, including tolling the statute of limitations.

Ongoing Enforcement Themes

• “Indirectly” is not a loophole. Both actions turn on the principle that routing a prohibited dealing through an intermediary, a law firm, or a third-country distributor does not make it permissible. OFAC looks through form to economic reality.
• Structure built for the “appearance of compliance” can aggravate the violation and increase the penalty. FTI Consulting’s penalty was doubled precisely because a sophisticated firm engineered a payment structure it believed was safe. Apparent structuring around a prohibition is an aggravator, not a defense.
• Voluntary self-disclosure pays. Rice Lake self-disclosed and settled at base; FTI did not self-disclose and saw its penalty doubled. The contrast is a concrete argument for a ready, well-governed disclosure process.
• Less-than-blocking programs still bite. VTB was on the SSI List, not fully blocked, yet a 14-day debt-tenor rule produced a seven-figure settlement. Sectoral and menu-based restrictions require transaction-level scrutiny.
• Parent and subsidiary risk travels. Rice Lake was liable for a foreign subsidiary’s conduct; a one-line instruction without training or monitoring did not discharge the obligation.

Designations & List Activity Since June 1, 2026

Unlike the civil docket, OFAC’s listing activity has been intense. Entities were added or removed as sanctioned parties (and general licenses were adjusted), but they were not civil penalty actions. However, the designations directly reshape the parties and transactions that must be screened. OFAC designated roughly 101 legal entities and removed about 57 in July alone (excluding individuals and vessels).

Iran: A Renewed “Maximum Pressure” Campaign

Iran dominated the period. After a short-lived June understanding broke down and the U.S. resumed military operations and a Strait of Hormuz blockade, OFAC reinstated Iran oil sanctions on July 7 (revoking General License X, issuing General License X1 with a July 17 wind-down), then rolled out successive network designations: the Ali Ansari financial network and Iranian exchange houses (July 10, with General License Y); a large expansion of the Shamkhani shipping and sanctions-evasion network on July 14 (50-plus persons and vessels across the UAE, Singapore, Hong Kong, and India, pushing that network’s cumulative total above 200, with wind-down General License Z through September 12); and seven members of an IRGC weapons-procurement network on July 15 under E.O. 13382. Iran-related designations continued through late July and into August. A large share of July’s designations were made under the Iran E.O. 13902 authority.

Counter-Narcotics: Major CJNG Action

On July 23, OFAC designated more than 50 Mexican persons tied to the Cartel de Jalisco Nueva Generación (CJNG), a designated Foreign Terrorist Organization and Specially Designated Global Terrorist, under E.O. 14059 and E.O. 13224, reportedly including a dual Mexican-U.S. national alleged to be the cartel’s new leader, and including a set of corporate networks. The action, coordinated with the Homeland Security Task Force, extends a multi-year campaign (250-plus CJNG-linked designations since 2015) and was paired with FinCEN attention to cartel fuel-theft/smuggling typologies.

Cuba, Venezuela, and Other Programs

Cuba. A July 23 State Department action designated nine entities and two individuals (including energy-sector targets tied to Cuba’s state-owned oil and gas company, CUPET), followed by further Cuba-related designations and FAQ guidance in early August.

Venezuela. OFAC issued three Venezuela-related general licenses and amended FAQ 595 on June 18, and amended a Venezuela general license and FAQ again in early August, a licensing-driven, transition-management posture rather than new designations.

Counter-terrorism & non-proliferation. Routine counter-terrorism and non-proliferation designations and updates continued (e.g., July 30), alongside some counter-terrorism list removals in August.

Recommended Actions

Refresh screening against a fast-moving list. Companies should re-screen active counterparties and pipelines against the very recent changes, and re-run logic to reflect removals, not just additions.

1. Hunt for indirect exposure. Companies should map where intermediaries sit in their dealings, agents, distributors, and payment routers, and test whether any structure leaves a sanctioned party as the true economic counterparty or ultimate obligor.
2. Scrutinize less-than-blocking regimes. Companies should build transaction-level checks for sectoral/menu-based restrictions (e.g., debt-tenor limits) where a counterparty is restricted but not fully blocked.
3. Extend controls to foreign subsidiaries. Companies should confirm U.S.-owned or -controlled foreign entities understand and apply the sanctions that flow to them, as well as replace one-line notices with localized, translated guidance, training for all relevant staff, and monitoring.
4. Heighten diligence on high-diversion hubs. Companies should apply enhanced end-user and downstream-distributor vetting for shipments through jurisdictions such as the UAE, and add reexport-control language to commercial documents.
5. Ready the voluntary self-disclosure playbook. The FTI/Rice Lake contrast shows the tangible value of prompt disclosure and cooperation. Companies should confirm their escalation, tolling, and disclosure decision framework before they need it.

[1] The JCPOA—the Joint Comprehensive Plan of Action—is the 2015 nuclear agreement between Iran and the P5+1 countries (the United States, United Kingdom, France, Russia, China, and Germany), plus the European Union. Under the deal, Iran accepted limits on its nuclear program and enhanced international monitoring in exchange for sanctions relief, including the suspension or lifting of certain nuclear-related U.S., EU, and UN sanctions. In 2018, the United States withdrew from the JCPOA and reimposed many Iran-related sanctions, which is why the agreement is often referenced in sanctions and export-control contexts.

Read more about LBKM’s U.S. Sanctions practice, or visit our Sanctions Library for additional OFAC resources and updates.

This advisory is provided for informational purposes only and does not constitute legal advice. Receipt of this advisory does not create an attorney-client relationship.