The Office of Foreign Assets Control (OFAC) is an office of the U.S. Department of the Treasury responsible for implementing and enforcing economic and trade sanctions based on U.S. foreign policy and national security goals.
Key Points:
- Mission: OFAC administers and enforces sanctions against targeted foreign countries, regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to U.S. national security, foreign policy, or economy.
- Sanctions Programs: OFAC sanctions can include comprehensive embargoes or targeted measures such as asset freezes, travel bans, and restrictions on certain types of financial transactions.
- Specially Designated Nationals (SDN) List: OFAC maintains a list of individuals, groups, and entities, such as terrorists and narcotics traffickers, designated under programs that are not country-specific. U.S. persons are generally prohibited from dealing with these entities.
- Compliance Requirements: U.S. businesses, financial institutions, and individuals must ensure they do not engage in prohibited transactions with designated entities or countries. This involves robust screening processes and adherence to OFAC regulations to avoid penalties.
- Penalties for Non-Compliance: Violations of OFAC regulations can result in significant civil and criminal penalties, including substantial fines and imprisonment.
Importance:
OFAC’s role is critical in protecting the U.S. financial system from abuse by illicit actors and supporting international efforts to maintain global security and stability. Compliance with OFAC regulations is essential for businesses operating within or with connections to the U.S. financial system.
Learn more on the OFAC website: https://ofac.treasury.gov/
