On October 9, 2026, the U.S. Office of Foreign Assets Control (OFAC) published an enforcement release: Pegasus Worldwide Logistics, a California freight forwarder, agreed to pay $175,015 to settle apparent violations of 31 C.F.R. part 599 and of 31 C.F.R. § 501.602(a). Pegasus shipped equipment from Youli Technology Development Co., Ltd., designated on May 30, 2023 under E.O. 14059 and later renamed Huizhou Youli Fushi Co., Ltd.
US freight forwarders and NVOCCs arranging imports of equipment from China, US customs brokers filing Importer Security Filings for shipments from renamed suppliers, US importers of packaging and processing machinery that use third-party logistics providers, and US logistics intermediaries that screen counterparties against the SDN List must immediately screen every identifier they hold (legal name, address, email and phone) against the SDN List before instructing a foreign shipper, stop payments and search records when a CBP detention notice names OFAC, and answer any OFAC administrative subpoena with a complete certified response, or dealings in blocked property can draw a civil monetary penalty under the OFAC Enforcement Guidelines (the base schedule amount in this non-egregious, non-voluntary case was $205,900) and separate penalties under 31 C.F.R. § 501.602 for an incomplete subpoena response, and CBP may seize the shipment as blocked property. The October 9, 2026 enforcement release is the public act.
- Authority : U.S. Office of Foreign Assets Control
- Entity : Pegasus Worldwide Logistics
- Measure and amount : settlement of $175,015 (base schedule amount $205,900; non-egregious, not voluntarily self-disclosed)
- Legal basis : 31 C.F.R. § 599.201 and 31 C.F.R. § 501.602(a)
- Decision date : October 9, 2026
- Official source : OFAC enforcement release, Pegasus Worldwide Logistics, October 9, 2026
What happened
In August 2023 a U.S. purchaser engaged Pegasus to ship a $5,950 machine from Youli. On September 12, 2023, Pegasus emailed an SDN-listed address and instructed a Chinese agent to ship. Documents used Huizhou Youli Fushi Co., Ltd. and the unchanged telephone number. Pegasus filed an Importer Security Filing and paid the agent $146.33 on or after September 28, 2023. After a November 3, 2023 CBP detention notice naming OFAC, Pegasus paid $1,463.55 in duties. CBP seized the machine on December 6, 2023.
The breach
The release states that Pegasus appears to have violated § 599.201 of 31 C.F.R. part 599 "by dealing with a blocked person or in property in which a blocked person had an interest." Pegasus screened only the new name. From February 1, 2024 to August 8, 2024 it also violated § 501.602(a) six times by failing, in the release's words, "to furnish complete information responsive to OFAC's administrative subpoena." OFAC treated the case as non-egregious and not voluntarily self-disclosed.
Who else is in the same regime
The same provisions reach the freight forwarders, NVOCCs, customs brokers, machinery importers and logistics intermediaries named above: U.S. persons who arrange, file or pay for a shipment in which an SDN has an interest.
What to check now
- Screen legal name, address, email and phone against the SDN List before instructing a foreign shipper.
- When documents show a new legal name, re-screen the phone, email and address OFAC published for the designated party.
- When a CBP detention notice names OFAC, stop further payments, including duties and agent fees, and search the file before any additional dealing.
- On an OFAC administrative subpoena, search every identifier OFAC lists and file one complete certified response under 31 C.F.R. § 501.602(a).
- Treat a freight payment, an ISF filing and a duty payment as dealings under 31 C.F.R. § 599.201 when an SDN has an interest.
