Tuesday, January 18, 2011

What is OFAC? and the SDN list (aka the Patriot Act Search)

OFAC stands for, “The Office of Foreign Assets Control” and SDN stands for, “Specially Designated Nationals”. This is a part of the US Department of the Treasury. Its job is to  oversee 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. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

Who should be OFAC compliant?
Any businesses large or small needs to make the effort to ensure that they are not doing business with restricted individuals or entities. If you are making payments, you need to have a compliance program.

Here is the official link to the OFAC SDN list: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx
However you may like to use the Instant OFAC website which provides a useful search engine to check if a vendor is OFAC compliant: http://www.instantofac.com/search.php

Articles regarding OFAC fines for non-compliance:
http://treas.tpaq.treasury.gov/press/releases/tg691.htm
http://sanctionlaw.com/2010/12/28/discover-and-wells-fargo-banks-settle-ofac-violations/
http://www.bullfax.com/?q=node-british-watchdog-fines-barclays-over-investment-failure
http://www.customsandinternationaltradelaw.com/2010/11/articles/export/ofac-1/miami-aircraft-company-pays-250000-fine-for-lying-to-ofac/
http://www.exportlawblog.com/archives/2589

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