Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control (OFAC) is in charge of administering and enforcing United State’s economic sanctions. A sanction is when a country imposes a penalty upon another country, company, or individual. The United States issues sanctions based on its foreign policy and national security interests. Each sanction is different and has its own set of regulations.

As of 2004, unless authorized by OFAC, no individual or company can do business with (or on behalf of) any individual, company, or government institution in:

  • Cuba;
  • Iran; or
  • Sudan.

If your company is caught violating a sanction, you could have your goods seized, spend up to 30 years in prison, and/or receive a fine up to $10,000,000. In 2014, OFAC issued fines for over $1,000,000,000 to various United States owned or controlled companies.

SDN List

OFAC publishes all sanctioned individuals, companies and countries online. This list is called the Specially Designated Nationals List (SDN List). The list contains thousands of names and is ever-changing. OFAC also published a list of companies or individuals that have been caught violating sanctions, as well as the consequence they were assigned. Having your company’s name on the list could ruin it’s reputation.

Before entering into any contracts or business ventures with a party outside the United States, it is prudent to cross check all parties with the SDN List. This list is ever changing. Depending on the amount of business you do internationally, you may want to check the list frequently.

It is important to consult with an international business attorney when taking your business ventures outside the United States. There is a high possibility that you could make an error, and unknowingly violate OFAC or another international law.