OFAC is the Office of Foreign Assets Controls under the US Department of Treasury. Essentially, OFAC is the US agency that governs both economic and trade sanctions as defined under US foreign policy. The main job of OFAC is to be the “police” of financial transactions and trade that are performed by US corporations and/or US persons with foreign companies/individuals.
To be blacklisted by OFAC, means that an individual and/or company have been placed on the list and are denied/blocked from further service from US persons. This list, which is also referred to as the SDN List (Specially Designated Nationals List) allows OFAC the ability to enforce the discontinuation of US dealings with blocked persons. How does a person or company wind up on the blacklist? This question like so many other valid questions remains unanswered. Due to extenuating circumstances and information gathered, an individual or company can end up on the list that may not privy to the “average person”. The OFAC “Blacklist” is always growing and updates constantly.
So what does this mean to you as a US citizen or someone who works for a globally centric US based company? First, if you have dealings with foreign companies or individuals, you should be cognizant of who you are actually dealing with and their OLFAC status. Complete those strenuous background checks and validate all of those references before performing business. Second, be proactive and check the SDN list for any foreign company or individual that you may potentially be engaging in business. The following link will allow you to check out the latest SDN list (last updated on December 19th 2013) posted on the US Treasury website: http://www.treasury.gov/ofac/downloads/t11sdn.pdf
If you are still not convinced of the importance of the OFAC Blacklist, perhaps the following consequences of penalties will convince you. If a company is found to be non- compliant with OFAC, the penalties that may ensue are quite hefty. For instance, a company may be subjected to a minimum fine of $250,000 per actual violation. There are also potential imprisonment typically runs about 10 to 30 years. Adherence to the OFAC regulations is crucial for companies who do business with foreign companies and or individuals. In short, be vigilant in your verification practices and seek counsel for legal compliance.
1) http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of- Foreign-Assets-Control.aspx