OFAC – Office of Foreign Assets Control (US Sanctions Authority)

OFAC (Office of Foreign Assets Control) is an agency of the US Department of the Treasury that administers US economic and trade sanctions against target persons, organisations, and countries. OFAC enforces sanctions programmes based on national emergency powers, UN Security Council resolutions, and federal statutes.

• SDN List: Specially Designated Nationals and Blocked Persons — the most important global sanctions list.
• Secondary sanctions: Can affect non-US persons who conduct business with sanctioned states or persons.
• 50% Rule: Entities owned 50%+ by SDN persons are also sanctioned.
• Global reach: Worldwide jurisdiction through US dollar clearing dominance.

OFAC was established in 1950 in the context of the Korean War as successor to the Office of Foreign Funds Control (established 1940 to combat Nazi assets). In subsequent decades, OFAC administered sanctions programmes against Cuba (from 1962), Iran (from 1979), Libya, Iraq, and other countries. After the end of the Cold War and especially after 9/11 2001, OFAC became a central pillar of US foreign and security policy. The number of sanctions programmes grew from fewer than 10 in the 1990s to over 35 active programmes (2024). The imposition of billion-dollar fines on international banks (BNP Paribas: USD 8.9 billion, 2014; Standard Chartered: multiple sanctions) made OFAC compliance a global issue. Since 2022, OFAC has administered the most extensive Russia sanctions packages to date.

OFAC sanctions affect:

• US persons (citizens, residents, US companies) worldwide
• Transactions in US dollars through international banks (dollar clearing)
• Non-US persons under secondary sanctions
• All sectors: finance, energy, arms, technology, shipping, aviation

Active programmes include: Iran, North Korea, Cuba, Russia, Venezuela, Myanmar, Belarus, Syria, counterterrorism (SDGT), narcotics trafficking (SDNTK).

• US persons may not conduct transactions with SDN-listed persons/countries.
• 50% Rule: entities majority-owned by SDN persons are also blocked.
• No licenses for prohibited transactions without explicit OFAC authorisation.
• Real-time screening against current SDN, OFAC lists; regular updates required.
• Reporting obligation upon matches; freezing of relevant assets.
• Secondary sanctions risk for non-US banks offering dollar clearing.

OFAC (US) and EU Sanctions are parallel sanctions regimes — cross-reference was missing.