OFAC: Office of Foreign Assets Control

The Office of Foreign Assets Control (OFAC) is a US Treasury department that administers and enforces economic and trade sanctions based on US foreign policy and national security goals.

OFAC's Role

Sanctions Administration

• Maintains the SDN List of sanctioned parties
• Administers country-based programs (Cuba, Iran, North Korea, Russia)
• Administers sector-specific sanctions

Enforcement

• Investigates potential violations
• Issues civil penalties (can reach millions of dollars per violation)
• Provides guidance on compliance programs

Licensing

• Issues licenses for authorized transactions with sanctioned parties
• Provides general licenses for categories of permitted activity

OFAC and KYB

For KYB compliance, OFAC screening is mandatory:

Business entity: May be directly sanctioned

Beneficial owners: Ownership by sanctioned persons

Directors/officers: Control by sanctioned persons

Connected parties: For certain programs

Strict Liability

OFAC operates on a strict liability basis—penalties apply even for inadvertent violations. This makes robust sanctions screening essential.

OFAC Resources: https://ofac.treasury.gov

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Related: SDN | Sanctions Screening | AML