US Office of Foreign Assets Control (OFAC)

What Is the US Office of Foreign Assets Control (OFAC)?

The US Office of Foreign Assets Control (OFAC) is an agency within the US Department of the Treasury responsible for enforcing economic and trade sanctions based on US foreign policy and national security goals.

Its primary objective is to combat threats to national security posed by individuals, organizations, and countries engaged in terrorism, narcotics trafficking, proliferation of weapons of mass destruction, and other illicit activities.

OFAC’s Key Role

One of the key functions of OFAC is to maintain and publish the Specially Designated Nationals and Blocked Persons List (SDN List).

This list includes individuals, entities, and groups identified as threats to US interests, and their assets are blocked or frozen.

US citizens and companies are generally prohibited from engaging in any transactions or dealings with those on the SDN List.

The authority of OFAC is derived from various laws and executive orders, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, and other legislation.

Congress or the President can impose sanctions during a state of emergency or in response to specific threats or violations of international norms.

Enforcing Targeted Sanctions

In addition to maintaining the SDN List, OFAC implements and enforces various economic and trade sanctions programs targeting specific countries, entities, or individuals.

These sanctions can include restrictions on financial transactions, trade, investment, and other economic activities with the designated targets.

OFAC has increasingly focused on the regulation of cryptocurrency activities in recent years.

It has investigated and taken enforcement actions against individuals and companies involved in illicit cryptocurrency transactions, including money laundering, sanctions evasion, and financing of illegal activities.

Cryptocurrency exchanges and other virtual asset service providers are expected to implement robust compliance measures to prevent transactions with sanctioned individuals or entities.

To avoid potential legal and financial consequences, compliance with OFAC regulations is essential for individuals and businesses operating in the international financial system.