About the Course
Introduction
This CLE webinar will examine the U.S. Department of the Treasury's Office of Foreign Assets Control's (OFAC) recently issued advisory, "Guidance on Sham Transactions and Sanctions Evasion," and discuss what this may signal for agency enforcement activity. The panel will look at red flags that may indicate a sham transaction, provide examples of sham transactions, and discuss the possible erosion of the bright line 50 Percent Rule for ownership. The panel will address how the guidance may impact client advisement and offer best practices for minimizing the risk of enforcement action.
Description
OFAC recently issued an advisory, "Guidance on Sham Transactions and Sanctions Evasion," that highlights sanctions risks arising from sham transactions used to evade sanctions and identifies the characteristics of such transactions.
Sham transactions occur when blocked persons, often operating through opaque legal structures (e.g., trusts), proxies, or other intermediaries, effectuate transfers or other arrangements that conceal rather than extinguish their continuing interest in property such as investment vehicles, bank accounts, real estate holdings, and companies.
The guidance provides several non-exhaustive "red flags" that are indicia of sham transactions including:
- Commercially unreasonable transactions
- Transfers to family members or close associates
- Unclear purpose of transfer
- Unduly complex corporate structures involving higher-risk jurisdictions
- Continued involvement of a blocked person.
The guidance suggests heightened due diligence requirements for covered entities and erodes the bright line distinction of the 50 Percent Rule whereby entities that are 50% or more owned by one or more blocked persons are considered blocked by operation of law.
Listen as our expert panel provides a comprehensive overview of OFAC's new sham transactions guidance. The panel will discuss how the new guidance differs from prior longstanding OFAC guidance, including how the 50 Percent Rule may now come into play, and what impact this may have on OFAC enforcement action. The panel will also offer best practices for compliance.
Presented By
Mr. Marquardt is a nationally recognized CFIUS and sanctions lawyer advising on a range of cross-border matters. He has over 25 years of experience in foreign investment reviews and in economic sanctions and financial crimes compliance and enforcement. Mr. Marquardt has been guiding companies through CFIUS since the 1990s. He advises a wide range of clients, including sovereign and state-owned entities, around the world and deals regularly with CFIUS, OFAC, the U.S. Departments of Justice and State, the Bureau of Industry and Security, and other U.S. and international regulators. His practice includes advisory, transactional, compliance, internal investigation and enforcement matters.
Mr. Schisa advises clients on the economic sanctions laws and regulations administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). In addition to sanctions, he advises clients on U.S. anti-money laundering (AML) and export control laws and regulations and also supports the firm’s practice before the Committee on Foreign Investment in the United States (CFIUS).
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, July 16, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Introduction
A. History of prior guidance related to sham transactions
II. New OFAC guidance
A. Purpose
B. Characteristics of sham transactions
C. Red flags
D. The 50 Percent Rule
E. Examples of sham transactions
F. Enforcement
III. The guidance as part of a larger regulatory picture
IV. Best practices for compliance
The panel will review these and other important considerations:
- How does the new sham transactions guidance differ from prior OFAC guidance?
- What effect does this guidance have on the 50 Percent Rule? With what impact on counsel when advising clients on compliance?
- What are best practices for due diligence to minimize the risk of enforcement action under the new guidance?
Related Courses
New OFAC Sham Transactions Guidance: Red Flags, Erosion of the 50 Percent Rule, Increased Due Diligence Obligations
Thursday, July 16, 2026
1:00 PM ET/10:00 AM PT
