Yes, mutual funds and other investment vehicles are subject to OFAC regulations. Any financial entity that could facilitate a transaction or provide benefit to a sanctioned individual or entity must conduct appropriate screening. This includes verifying investors, counterparties, and the origin or destination of funds. Mutual funds are legally obliged to ensure that no assets are invested in or benefit parties included in the SDN list or other OFAC sanctions programs. Violations can lead to substantial fines and reputational damage. Fund managers are required to implement compliance procedures, maintain records of screenings, and regularly update their internal controls to reflect current OFAC lists.
