OFAC stands for Office of Foreign Assets Control — a U.S. Treasury agency that administers and enforces economic and trade sanctions against foreign countries, governments, terrorist organizations, and individuals based on U.S. foreign policy and national security goals.
What Does OFAC Stand For?
OFAC — the Office of Foreign Assets Control — is a financial intelligence and enforcement agency of the U.S. Department of the Treasury. Established in 1950, OFAC is one of the most powerful regulatory bodies in the world, with jurisdiction extending far beyond U.S. borders. Its sanctions programs affect international banks, multinational corporations, and individuals in virtually every country.
| Fact | Detail |
|---|---|
| Full name | Office of Foreign Assets Control |
| Parent agency | U.S. Department of the Treasury |
| Established | 1950 |
| Active sanctions programs | 30+ |
| SDN list entries | 12,000+ |
| Max civil penalty | $1.3 million per violation |
| Criminal penalty | Up to $1M + 20 years |
What Does OFAC Do?
OFAC administers and enforces U.S. economic sanctions based on national security and foreign policy objectives. Its core functions include:
- Maintaining the SDN List — The Specially Designated Nationals list identifies over 12,000 individuals and entities whose assets are blocked and with whom U.S. persons are prohibited from dealing.
- Administering sanctions programs — OFAC oversees 30+ country and thematic sanctions programs, including programs targeting Iran, Cuba, North Korea, Russia, and Syria.
- Issuing licenses — OFAC grants general and specific licenses authorizing transactions that would otherwise be prohibited.
- Enforcing compliance — OFAC investigates violations and imposes civil penalties. In serious cases, it refers matters for criminal prosecution.
Who Must Comply with OFAC?
OFAC jurisdiction is broad. Compliance is mandatory for:
- All U.S. citizens and permanent residents, wherever located
- All entities organized under U.S. law (including foreign branches)
- Any person or entity physically present in the United States
- Foreign persons transacting in U.S. dollars through U.S. banks
- Entities subject to secondary sanctions programs
Non-U.S. companies are increasingly exposed to OFAC through secondary sanctions — penalties targeting non-U.S. parties that do business with sanctioned countries or entities. See our OFAC compliance guide for full program requirements.
OFAC Sanctions Programs
OFAC operates more than 30 active sanctions programs. These fall into two broad categories:
Country-based programs target specific jurisdictions — such as the Iranian Transactions and Sanctions Regulations (ITSR), the Cuban Assets Control Regulations (CACR), and the North Korea Sanctions Regulations (NKSR). Comprehensive programs prohibit virtually all transactions with the targeted country.
Thematic programs target specific activities regardless of geography — including counterterrorism (SDGT), narcotics trafficking (SDNTK), cyber-related threats, and weapons of mass destruction proliferation.
What Happens If You Violate OFAC?
OFAC violations carry strict civil and criminal penalties. Civil penalties are strict liability — meaning OFAC does not need to prove intent. The maximum civil penalty is $1,330,783 per violation or twice the transaction value, whichever is greater. Criminal penalties under IEEPA include up to $1 million per violation and 20 years imprisonment.
If you believe you have committed an OFAC violation, voluntary self-disclosure can reduce penalties by up to 50%. Our OFAC sanctions lawyers handle enforcement defense, SDN removal petitions, and voluntary self-disclosure across 40+ countries. Contact us for a free consultation.