Voluntary self-disclosure definition

Voluntary self-disclosure

A self-initiated notification to OFAC of an apparent violation, made before or at the same time as OFAC or another authority discovers it, which lowers the base penalty.

also known as

VSD

reviewed

2026-10-02

Cite this page

APA 7

Sanctions Evasion Reference. (2026, October 2). Voluntary self-disclosure. https://sanctionsevasion.org/reference/glossary/voluntary-self-disclosure/

Chicago

Sanctions Evasion Reference. “Voluntary self-disclosure.” Last reviewed October 2, 2026. https://sanctionsevasion.org/reference/glossary/voluntary-self-disclosure/.

BibTeX

@misc{ser-reference-glossary-voluntary-self-disclosure,
  author = {{Sanctions Evasion Reference}},
  title  = {Voluntary self-disclosure},
  year   = {2026},
  note   = {Last reviewed 2026-10-02},
  url    = {https://sanctionsevasion.org/reference/glossary/voluntary-self-disclosure/}
}

The date is when this page was last reviewed, not when it was first published.

A voluntary self-disclosure lowers the base penalty: from the applicable schedule amount to one-half of the transaction value in a non-egregious case, and from the statutory maximum to half of it in an egregious one. It is the largest lever a company controls after the conduct has happened, and it has to come before the regulator already knows.

OFAC decides this strictly. In the Danfoss case the company disclosed in October 2017, five months after its bank had told it about the problem, and OFAC held that its submission “did not qualify as a voluntary self-disclosure” because it already had the information. In the Fracht case the company’s own submission was treated the same way because US agencies already knew of the aircraft. See how penalties are decided.

Where this term is used

How do gaps in acquisition integration create sanctions exposure? — A company buys a foreign business and keeps running its systems separately, so the acquired unit's transactions never pass through the parent's sanctions screening until someone thinks to connect them.
What happens when sanctions-screening controls go untested? — A firm builds real geo-blocking or screening controls, then never independently tests whether they still work, so a bug, a disabled setting or a discontinued tool runs unnoticed for months or years.

Related terms

Egregious case — OFAC's label for a particularly serious violation calling for a strong enforcement response, which sets a much higher starting penalty than a non-egregious case.
Tolling agreement — An agreement by a party under investigation to extend or suspend the statute of limitations, giving the regulator more time to finish before a deadline would otherwise bar action.
Strict liability — Civil liability that does not depend on knowing or having reason to know a transaction was prohibited. OFAC applies it, and the UK's OFSI has since 15 June 2022.

Sources

Economic Sanctions Enforcement Guidelines, Appendix A to 31 CFR Part 501. U.S. Department of the Treasury, Office of Foreign Assets Control, 2026. Sections I (definitions), II (responses), III (general factors), V.B (penalty calculation).

Civil Penalties and Enforcement Information. U.S. Department of the Treasury, Office of Foreign Assets Control, 2026.