Close this search box.

Table of Contents

Office of Foreign Asset Control (OFAC)


The Office of Foreign Assets Control (OFAC) is a division within the U.S. Department of the Treasury, responsible for implementing and enforcing economic sanctions against foreign countries, organizations, and individuals. These sanctions are imposed by the United States in response to national security concerns, threats, or to promote foreign policy objectives. OFAC ensures compliance by monitoring and regulating financial transactions and freezing assets belonging to the sanctioned entities.


The phonetics of the keyword “Office of Foreign Asset Control (OFAC)” can be represented as:ˈɒfɪs əv ˈfɒrɪn ˈæsɛt kənˈtroʊl (OH-fak)

Key Takeaways

  1. The Office of Foreign Assets Control (OFAC) is a U.S. Department of the Treasury agency responsible for implementing and enforcing economic and trade sanctions based on U.S. foreign policy and national security objectives.
  2. OFAC targets individuals, entities, and countries to protect U.S. citizens and further the interests of U.S. foreign policy. These sanctions may include blocking assets, prohibiting trade, and various economic restrictions.
  3. Compliance with OFAC regulations is crucial for companies and individuals conducting international businesses. It is important for businesses to implement processes for checking against the Specially Designated Nationals (SDN) list and other relevant OFAC lists to avoid penalties, fines, and reputational damage.


The Office of Foreign Assets Control (OFAC) is a crucial component in the field of business and finance due to its role in enforcing economic and trade sanctions imposed by the United States government. OFAC, operating under the U.S. Department of the Treasury, is responsible for administering and implementing these sanctions against targeted foreign countries, organizations, and individuals engaged in activities like terrorism, narcotics trafficking, or the proliferation of weapons of mass destruction. This regulatory body helps maintain national security and ensure compliance with U.S. policies while protecting the global financial system from misuse. Therefore, for businesses and financial institutions, understanding and adhering to OFAC guidelines is essential in mitigating legal, financial, and reputational risks associated with noncompliance, facilitating global trade while maintaining responsible business practices.


The Office of Foreign Assets Control (OFAC) plays a crucial role in the enforcement of economic and trade sanctions in the United States. Established within the Department of the Treasury, its primary purpose is to promote national security, protect foreign policy interests, and combat illicit activities such as terrorism, drug trafficking, money laundering, and weapons proliferation. OFAC achieves its objectives by imposing embargoes, restrictions on financial transactions, and asset freezes on targeted individuals, entities, and countries. These measures aim to deprive wrongdoers of the financial means to continue their harmful activities and to hold them accountable for their actions.

To ensure compliance and effectiveness, OFAC actively collaborates with domestic and international partners, including law enforcement agencies, financial institutions, and other regulatory bodies. They provide guidance, training and resources to assist the public and private sectors in understanding and adhering to OFAC regulations. While primarily targeting wrongdoers, these regulations can also impact businesses operating on a global scale. It is essential for companies engaged in international trade or financial transactions to have a thorough understanding of OFAC rules and sanctions programs to avoid hefty financial penalties and reputational damage. Through its efforts, OFAC strives to create a safer, more stable international environment that helps protect the United States and its allies from threats posed by sanctioned parties.


1. BNP Paribas Sanctions Settlement (2014): BNP Paribas, a French multinational bank, was fined $8.97 billion by the U.S. authorities, including OFAC, for violating U.S. sanctions against Sudan, Iran, and Cuba. The bank processed thousands of transactions through the U.S. financial system on behalf of the sanctioned entities between 2004 and 2012. This remains one of the largest fines ever levied by OFAC.

2. HSBC Sanctions Settlement (2012): HSBC, a British multinational banking and financial services organization, reached a $1.92 billion settlement with several U.S. authorities, including OFAC, to resolve allegations of money laundering and sanctions violations involving Iran, Libya, Sudan, and Burma, as well as violations of the Trading with the Enemy Act. The settlement highlighted the importance of robust OFAC compliance programs and the risks associated with inadequate control measures.

Office of Foreign Asset Control (OFAC)3. Schlumberger Settlement (2015): Schlumberger Ltd, a global oilfield services company, agreed to pay $232.7 million as part of a settlement with the U.S. Department of Justice and OFAC for violations of U.S. sanctions related to Iran and Sudan. It was found that the company facilitated transactions and provided services to customers in both countries through its non-U.S. subsidiaries. The case underscored the need for multinational companies to have effective compliance programs to prevent breaches of U.S. sanctions laws.

Frequently Asked Questions(FAQ)

What is the Office of Foreign Asset Control (OFAC)?

The Office of Foreign Asset Control (OFAC) is a U.S. Department of Treasury bureau responsible for administering and enforcing trade sanctions and economic embargoes against specific foreign countries, organizations, and individuals, in accordance with U.S. foreign policy and national security goals.

What is the main purpose of OFAC?

The main purpose of OFAC is to protect U.S. national security by imposing controls on trade, financial transactions, and other dealings with sanctioned countries, organizations, and individuals identified as threats to the United States or its allies.

How does OFAC enforce sanctions?

OFAC enforces sanctions by maintaining comprehensive lists of sanctioned entities, known as the Specially Designated Nationals and Blocked Persons (SDN) list, and monitoring and regulating transactions between U.S. persons and these designated entities. Violations of OFAC regulations can result in severe penalties, including fines and legal consequences.

Who must comply with OFAC regulations?

All U.S. persons, including citizens, residents, businesses, and financial institutions, are required to comply with OFAC regulations, regardless of their location. Additionally, foreign entities that conduct business within or involving the United States are also subject to OFAC regulations.

How can I check if a person or entity is on the OFAC list?

You can search the OFAC’s Specially Designated Nationals and Blocked Persons (SDN) list on the U.S. Department of Treasury’s website. It’s important to perform due diligence when engaging in transactions with foreign entities to avoid violating OFAC regulations.

Can OFAC sanctions change over time?

Yes, OFAC sanctions can and do change over time in response to evolving foreign policy and national security priorities. Sanctions may be added, modified, or lifted based on changes in circumstances or objectives.

What should I do if I believe I am involved in a transaction that may be in violation of OFAC regulations?

If you believe you are involved in a transaction that may violate OFAC regulations, you should consult with your legal counsel or an OFAC compliance expert, and consider ceasing the transaction until you have verified compliance. In some cases, entities may apply for a specific license from OFAC to engage in otherwise prohibited transactions under certain conditions.

Related Finance Terms

  • Economic Sanctions Programs
  • Specially Designated Nationals (SDN) List
  • Blocked Assets
  • Trade Compliance
  • Foreign Asset Investigations

Sources for More Information

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More