“Throughout the time period in which the apparent violations occurred, ELF’s OFAC compliance program was either nonexistent or inadequate,” OFAC said in its charging document.
“ELF’s OFAC compliance program was either nonexistent or inadequate throughout the time period in which the apparent violations occurred and appears not to have exercised sufficient supply chain due diligence while sourcing products from a region that poses a high risk to the effectiveness of the NKSR,” OFAC said.
Upon discovery, ELF voluntarily self-disclosed the violations to OFAC and cooperated with the investigation, which were mitigating factors when the agency imposed the final penalty amount against the company.
Since the violations, ELF has implemented supply chain audits that verify the country of origin of goods and services used in its products and stepped up training for key employees in the United States and China regarding U.S. sanctions regulations and other relevant U.S. laws and regulations.
OFAC recommends within corporate compliance programs that companies institute supply chain audits for country-of-origin verification, conduct mandatory OFAC sanctions training for suppliers and “routinely and frequently” perform supplier audits.