OFAC sanctions are economic and trade restrictions imposed by the U.S. government on foreign countries, organizations, and individuals deemed a threat to national security, foreign policy, or the economy. These sanctions are administered and enforced by the Office of Foreign Assets Control (OFAC), a U.S. government agency responsible for implementing economic sanctions programs.
OFAC sanctions prohibit U.S. companies and financial institutions from engaging in transactions with individuals or entities on the Specially Designated Nationals (SDN) list. This includes restrictions on financial transactions, imports and exports, and other commercial activities. Companies and financial institutions must conduct “OFAC checks” on their customers, transactions, and other relevant information to ensure they are not engaging with individuals or entities on the SDN list.
OFAC sanctions also apply to foreign companies and financial institutions that are involved in transactions with the U.S. or have U.S. connections. This means that non-American companies and financial institutions may also be required to comply with OFAC sanctions regulations.
Penalties for violating OFAC sanctions can be severe, including civil fines, criminal penalties, and even imprisonment. Companies and financial institutions may also face reputational damage, loss of business opportunities, and other consequences if they are found to be in violation of OFAC regulations.
In conclusion, OFAC sanctions are economic and trade restrictions imposed by the U.S. government on foreign countries, organizations, and individuals deemed a threat to national security, foreign policy, or the economy. Companies and financial institutions must comply with OFAC sanctions regulations by performing “OFAC checks” to ensure they are not engaging with individuals or entities on the SDN list, and penalties for violating OFAC sanctions can be severe.
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This page was last updated on January 29, 2023.
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