The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the U.S. Department of the Treasury. It administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy objectives.
History and Structure
Founded in 1950 as the Division of Foreign Assets Control, OFAC has operated under the Office of Terrorism and Financial Intelligence within the Treasury Department since 2004. It is primarily composed of intelligence targeters and lawyers.
- Sanctions Administration: OFAC administers sanctions against foreign governments, organizations (including terrorist groups and drug cartels), and individuals deemed a threat to U.S. national security.
- Investigations: While many of OFAC’s targets are broadly set by the White House, most individual cases are developed as a result of investigations by OFAC’s Office of Global Targeting.
Compliance and Enforcement
Businesses that facilitate payments, international transactions, or cross-border commerce must screen counterparties against OFAC’s sanctions lists to avoid penalties, maintain compliance, and prevent illicit financial activity.
- Penalties: Non-compliance with OFAC sanctions can result in significant financial penalties and legal consequences.
- Screening: Regular screening of transactions and counterparties against OFAC’s lists is essential for compliance.
