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OFAC Sanctions Compliance Policy

Hromada · Version 1.0

Hromada (“the Project”) is committed to full compliance with all United States sanctions laws and regulations administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury. All funds received by the Project originate from U.S. donors through a 501(c)(3) tax-exempt fiscal sponsor. All international disbursements are subject to the screening and compliance procedures set forth in this policy.

  1. Project Director — Primary Compliance Officer. Responsible for conducting all pre-disbursement screening, maintaining compliance records, and reporting any concerns to the Fiscal Sponsor.
  2. Alternate Project Director — Backup Compliance Officer. Assumes all compliance responsibilities in the event the Project Director is unable to fulfill their duties.
  3. Fiscal Sponsor. Reviews and approves all disbursements pursuant to the Fiscal Sponsorship Agreement. Retains authority to suspend any disbursement pending resolution of compliance concerns.

Prior to any international disbursement, the Compliance Officer shall:

  1. Screen the recipient municipality name, in both English and Ukrainian transliteration, against the OFAC Consolidated Sanctions List;
  2. Screen the full legal name of the municipality’s signing official (mayor, administrator, or authorized representative) against the OFAC Consolidated Sanctions List;
  3. Screen the name of any contractor, vendor, or third-party recipient receiving more than $2,500 in Project funds against the OFAC Consolidated Sanctions List;
  4. Conduct screening using OFAC’s Sanctions List Search tool or an equivalent screening service approved by the Fiscal Sponsor;
  5. Document all screening results, including date of screening, names screened, and search results, and retain documentation in the Project’s compliance file for a minimum of five (5) years from the date of the transaction.

No Project funds shall be disbursed, directly or indirectly, to:

  1. Any individual or entity appearing on the Specially Designated Nationals and Blocked Persons List (SDN List) or any other OFAC sanctions list;
  2. Any individual or entity located in, organized under the laws of, or ordinarily resident in the Crimean Peninsula, the so-called Donetsk People’s Republic, or the so-called Luhansk People’s Republic;
  3. Any transaction routed through or involving a financial institution identified on the Sectoral Sanctions Identifications List (SSI List) or otherwise blocked under U.S. sanctions;
  4. Any transaction that would otherwise violate Executive Orders 13660, 13661, 13662, 13685, or any subsequent executive orders imposing sanctions related to the Russian Federation or Ukraine.

In the event that sanctions screening returns a potential match:

  1. The Compliance Officer shall immediately halt the disbursement and shall not proceed with the transaction;
  2. The Compliance Officer shall investigate whether the match is a false positive by comparing available identifying information, including but not limited to dates of birth, addresses, identification numbers, and nationality;
  3. If the Compliance Officer determines, with supporting documentation, that the match is a false positive, the disbursement may proceed. The false-positive determination and supporting evidence shall be documented and retained for five (5) years;
  4. If the match cannot be conclusively resolved as a false positive, the Compliance Officer shall notify the Fiscal Sponsor’s designated representative within twenty-four (24) hours;
  5. No disbursement shall proceed until the Fiscal Sponsor provides written clearance or the potential match is otherwise resolved.
  1. The Compliance Officer shall re-screen all active recipient municipalities and their current signing officials on a quarterly basis, or more frequently if circumstances warrant;
  2. Re-screening shall be conducted promptly upon learning of any change in municipal leadership, project contractors, or other material changes to a recipient’s personnel or organizational structure;
  3. The Compliance Officer shall monitor OFAC announcements and Federal Register notices for new or amended sanctions designations related to the Russian Federation, Ukraine, or any other jurisdiction relevant to the Project’s operations.

Prior to onboarding any new municipality to the Hromada platform, the Compliance Officer shall:

  1. Verify that the municipality is located in territory under the effective control of the Government of Ukraine;
  2. Obtain and verify the full legal name and title of the municipality’s signing official;
  3. Confirm that the municipality is a recognized local government entity and not a private organization, shell entity, or front;
  4. Obtain a brief written description of the intended use of funds, confirming the project involves civilian infrastructure;
  5. Document all verification steps and retain records for a minimum of five (5) years.

All compliance records, including but not limited to screening results, due diligence documentation, false-positive determinations, disbursement approvals, compliance correspondence, and incident reports, shall be retained for a minimum of five (5) years from the date of the relevant transaction or event. Records shall be organized by recipient municipality and made available to the Fiscal Sponsor upon request.

  1. Any individual with authority to initiate, approve, or process disbursements on behalf of the Project shall review this policy in full prior to assuming such authority;
  2. All individuals subject to this policy shall acknowledge in writing, on an annual basis, that they have read, understand, and agree to comply with this policy;
  3. The Compliance Officer shall maintain records of all training acknowledgments.

In the event that the Project becomes aware of any potential sanctions violation or compliance breach:

  1. The Compliance Officer shall immediately halt the relevant transaction and take steps to prevent further exposure;
  2. The Compliance Officer shall notify the Fiscal Sponsor’s designated representative within twenty-four (24) hours of becoming aware of the potential violation;
  3. The Project Director and Fiscal Sponsor shall jointly assess whether a voluntary self-disclosure to OFAC is warranted. Voluntary self-disclosure is strongly encouraged, as it is considered a significant mitigating factor in any OFAC enforcement action;
  4. The Project shall cooperate fully with any investigation by OFAC, the Fiscal Sponsor, or other relevant authorities;
  5. The Compliance Officer shall document all actions taken in response to the potential violation and retain such records indefinitely.

This policy shall be reviewed at least annually by the Project Director and updated as necessary to reflect changes in applicable law, OFAC guidance, the Project’s operations, or the Fiscal Sponsor’s requirements. Any material amendments shall be provided to the Fiscal Sponsor in writing within thirty (30) days of adoption.

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