Mr. Sanctions

How did it do it?

Lastly, I asked Gemini to tell me what it decided to do, given the broad guidelines I gave it:

Here is the explanation of the calculation methods used for each of the six factors. These methods combine the logic you provided (tiers, ratios, and comparisons) into a consistent scoring algorithm.

Overview: The Tiered Weighting System

Before calculating individual factors, every “General Factor” mentioned in an enforcement action is assigned a weight based on its importance tier. This ensures that matching on “Willfulness” (Tier 1) counts for more than matching on “Future Compliance” (Tier 4).

  • Tier 1 (High Weight): Factors A (Willful/Reckless), B (Awareness/Management), C (Harm to Sanctions Program).
  • Tier 2 (Medium-High Weight): Factors D (Individual Characteristics), E (Compliance Program).
  • Tier 3 (Medium Weight): Factors F (Remedial Response), G (Cooperation).
  • Tier 4 (Low Weight): Factors H, I, J, K (Other factors like timing, penalties, etc.).

Factor 1: Generalized Behaviors

How similar are the specific actions taken by the violators?

This factor uses a Weighted Ratio Calculation:

  1. Identify Behaviors: We list the generalized behaviors for both the Target and the Comparison Action (e.g., “Wire Stripping,” “Ignoring Subpoena,” “Screening Failure”).
  2. Tier Assignment: Each behavior is linked to the General Factor it represents (e.g., “Ignoring Subpoena” = Factor A/Tier 1; “Screening Failure” = Factor E/Tier 2).
  3. Scoring Matches:
    • If a behavior appears in both actions: Add Positive Points (Weighted by Tier).
    • If a behavior appears in only one action: Add Negative Points (Weighted by Tier).
  4. Ratio Adjustment: We calculate the percentage of total behaviors that match.
    • Formula: (Count of Matching Behaviors / Total Distinct Behaviors).
    • If the ratio is high (e.g., 60%+), the final score is boosted. If low (e.g., 30%), the score is penalized.

Example: Matching on “Willful Disregard” (Tier 1) provides a massive score increase. Matching on “No Sanctions Software” (Tier 2) provides a moderate increase.

Factor 2: Aggravating Factors

How similar are the reasons OFAC cited for increasing the penalty?

This follows the same Weighted Ratio Calculation as Factor 1, but specifically for the aggravating factors listed in the enforcement release (e.g., “Reckless disregard,” “Management knowledge,” “Large entity”).

  1. Comparison: Compare the list of Aggravating Factors in the Target vs. the Comparison Action.
  2. Weighting: Apply the Tier weights (A-C get highest points).
  3. Ratio: Calculate the Match / Total ratio.
    • Goal: A high score here means both violators aggravated the situation in the same way (e.g., both involved senior management).

Factor 3: OFAC Penalty Grid Placement

Are the cases legally classified the same way?

This factor uses a “Waterfall” Logic Tree. It does not use weights or ratios; it assigns a fixed score based on where the cases fall on the standard OFAC 2×2 Penalty Matrix (Egregious/Non-Egregious vs. VSD/Non-VSD).

  1. Check for Exact Quadrant Match:
    • IF Target Quadrant == Comparison Quadrant: Score = Highest (100%)
  2. Check for “Egregious” Alignment:
    • ELSE IF both are Egregious: Score = High (80%)
  3. Check for “Non-VSD” Alignment:
    • ELSE IF both are Non-Voluntarily Self-Disclosed: Score = Medium-High (60%)
  4. Check for “Non-Egregious” Alignment:
    • ELSE IF both are Non-Egregious: Score = Medium-Low (40%)
  5. Check for “VSD” Alignment:
    • ELSE IF both are Voluntarily Self-Disclosed: Score = Low (20%)
  6. No Match:
    • ELSE: Score = Lowest (0%)

Factor 4: Cooperation

Did both parties cooperate (or fail to cooperate) to the same degree?

This factor is a Dependent Variable. It relies on the calculation of Factor 1.

  1. Determine Cooperation Level: Label both actions as either “Substantial Cooperation” or “Lack of Cooperation” (excluding Voluntary Self-Disclosure, which is handled in Factor 3).
  2. Check for Match:
    • IF both are “Substantial Cooperation” OR both are “Lack of Cooperation”: Match = True.
    • ELSE: Match = False.
  3. Calculate Score:
    • IF Match = True: Take the raw score calculated for Factor 1 and multiply by 0.70.
    • IF Match = False: Score is 0 or negative.

Why this matters: This ensures that “Cooperation” is weighted heavily but is always slightly less influential than the core “Behavior” (Factor 1).

Factor 5: Period of Time

Did the violations last for a similar duration?

This factor uses a Tiered Proximity Score.

  1. Assign Time Tiers:
    • Long: > 3 Years
    • Medium: 1 to 3 Years
    • Short: < 1 Year
  2. Compare Tiers:
    • IF Target Tier == Comparison Tier: Score = Highest (e.g., both are Medium duration).
    • ELSE IF Tiers are Adjacent (e.g., Medium vs. Long): Score = Intermediate.
    • ELSE (e.g., Short vs. Long): Score = Lowest.

Factor 6: Mitigating Factors

Did both parties receive credit for the same mitigating behaviors?

This uses the Weighted Ratio Calculation (same as Factors 1 and 2), but applied to Mitigating Factors (e.g., “First offense,” “Cooperation,” “Remedial measures”).

  1. Comparison: Compare the list of Mitigating Factors.
  2. Weighting: Apply Tier weights.
    • Note: Most Mitigating Factors fall into Tier 2 (Compliance Program) or Tier 3 (Remedial Response).
  3. Ratio: Calculate the Match / Total ratio.
    • Impact: If both parties were “First Offenders” (Tier 4/General Factor I) or had “Clean Records,” this score increases. If one had a clean record and the other was a repeat offender, the score decreases.

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