§ 505.402 Pre-Penalty Notice; settlement.
(a) When required. If OFAC has reason to believe that there has occurred a violation of any provision of the applicable part of this chapter or a violation of the provisions of any regulation, ruling, instruction, order, directive, or license issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to the applicable part of this chapter or otherwise under IEEPA and determines that a civil monetary penalty is warranted, OFAC will issue a Pre-Penalty Notice informing the alleged violator of the agency’s intent to impose a monetary penalty. A Pre-Penalty Notice shall be in writing. The Pre-Penalty Notice may be issued whether or not another agency has taken any action with respect to the matter. For a description of the contents of a Pre-Penalty Notice, see appendix A to part 501 of this chapter.
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1) Provision common to most IEEPA-based sanctions programs, with the exception of certain abbreviated sets of regulations.
2) Note that the "reason to believe" standard articulated in this provision is essentially the actual evidentiary standard OFAC employs in issuing penalties pursuant to regulations. (See Pre-penalty Notice - Anonymous Company (1), NT-185483 and comments thereto).
3) Consult the Research System for examples of pre-penalty notices, responses thereto and final penalty notices. Given that challenges to OFAC penalties are so rare, there are only a few public examples of what is essentially an OFAC enforcement action "docket," the most detailed being the administrative record in Epsilon Electronics Inc. (2014). See original PDF attached to Pre-Penalty Notice - Epsilon Electronics Inc. See also original PDF attached...