The Office of Foreign Assets Control (OFAC)
The Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States
Who must comply with OFAC regulations?
U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches. In the cases of certain programs, foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S.-origin goods to comply. [01-15-15]
How much are the fines for violating these regulations?
The fines for violations can be substantial. Depending on the program, criminal penalties for willful violations can include fines ranging up to $20 million and imprisonment of up to 30 years. Civil penalties for violations of the Trading With the Enemy Act can range up to $65,000 for each violation. Civil penalties for violations of the International Emergency Economic Powers Act can range up to $250,000 or twice the amount of the underlying transaction for each violation
OFAC Sanction Lists
1. Specially Designated Nationals (SDN)
List of Individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. persons are generally prohibited from dealing with them.
- List of Sanction Programs:
- Balkans-Related Sanctions
- Belarus Sanctions
- Burma Sanctions
- Central African Republic Sanctions
- Cote d’Ivoire (Ivory Coast)-Related Sanctions
- Counter Narcotics Trafficking Sanctions
- Counter Terrorism Sanctions
- Cuba Sanctions
- Democratic Republic of the Congo-Related Sanctions
- Iran Sanctions
- Iraq-Related Sanctions
- Lebanon-Related Sanctions
- Former Liberian Regime of Charles Taylor Sanctions
- Libya Sanctions
- Magnitsky Sanctions
- Non-Proliferation Sanctions
- North Korea Sanctions
- Rough Diamond Trade Controls
- Somalia Sanctions
- Sudan Sanctions
- South Sudan-related Sanctions
- Syria Sanctions
- Transnational Criminal Organizations
- Ukraine-/Russia-related Sanctions
- Yemen-Related Sanctions
- Zimbabwe Sanctions
2. Sectoral Sanctions Identifications List
List of persons operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662. The following activities by a U.S. person or within the United States are prohibited, except to the extent provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control:
(1) all transactions in, provision of financing for, and other dealings in new debt of longer than 30 days maturity or new equity of persons determined to be subject to this Directive (listed below), their property, or their interests in property;
(2) all activities related to debt or equity issued before the date of this Directive 1 (as amended) that would have been prohibited by the prior version of this Directive 1.
All other activities with these persons or involving their property or interests in property are permitted, provided such activities are not otherwise prohibited pursuant to Executive Orders 13660, 13661, or 13662 or any other sanctions program implemented by the Office of Foreign Assets Control.
3. Foreign Sanctions Evaders List
List of foreign individuals and entities determined to have violated, attempted to violate, conspired to violate, or caused a violation of U.S. sanctions on Syria or Iran. It also contains foreign persons who have facilitated deceptive transactions for or on behalf of persons subject to U.S. sanctions. Collectively, such individuals and companies are called “Foreign Sanctions Evaders” or “FSEs.” Transactions by U.S. persons or through the United States are prohibited if they involve the provision or procurement of goods or services, including financial services, or technology to or from a person on the FSE List without authorization from OFAC, unless the transaction is otherwise exempt from regulation under the International Emergency Economic Powers Act (e.g., certain travel-related transactions).
4. Non-SDN Palestinian Legislative Council List
Section (b) of General License 4 issued pursuant to the Global Terrorism Sanctions Regulations (31 C.F.R. Part 594), the Terrorism Sanctions Regulations (31 C.F.R. Part 595), and the Foreign Terrorist Organizations Sanctions Regulations (31 C.F.R. Part 597) authorizes U.S. financial institutions to reject transactions with members of the Palestinian Legislative Council (PLC) who were elected to the PLC on the party slate of Hamas, or any other Foreign Terrorist Organization (FTO), Specially Designated Terrorist (SDT), or Specially Designated Global Terrorist (SDGT), provided that any such individuals are not named on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List).
The individuals in the following list are PLC members who were elected on the party slate of an FTO, SDT, or SDGT. They do not, however, appear on the SDN List. As indicated above, transactions involving these individuals must be rejected.
5. Non SDN Iranian Sanctions List
U.S. financial institutions are prohibited from making loans or providing credits totaling more than $10,000,000 in any 12-month period to any person listed unless such person is engaged in activities to relieve human suffering and the loans or credits are provided for such activities.
6. The List of Foreign Financial Institutions Subject to Part 561 (the “Part 561 List”)
U.S. financial institutions are prohibited from opening or maintaining a correspondent account or a payable-through account for the foreign financial institution(s) listed, pursuant to 31 C.F.R. section 561.201(c):