NOTICE: The information below was obtained directly from the U.S. Department of the Treasury, Office of Foreign Assets Control website. Links are provided so you may access the content on the OFAC website.
FAST FACTS
- Dealers are required to search the OFAC list of Specially Designated Nationals and Blocked Persons before allowing anyone to purchase a unit.
- The search applies to everyone, including other dealers (wholesalers).
- If a unit is being sold to a company, the company name as well as the individuals making the purchase on behalf of the company must be checked against the list.
- Criminal penalties for willful violations can include fines ranging up to $20 million and imprisonment of up to 30 years.
- OFAC Specially Designated Nationals Search Tool may be accessed by clicking here.
The Mission of OFAC may be found by clicking here.
What is the Office of Foreign Assets Control?
The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.
The following two questions and answers may be found by clicking here.
11. Who must comply with OFAC regulations?
U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches. In the cases of certain programs, foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S.-origin goods to comply. [01-15-15]
12. How much are the fines for violating these regulations?
The fines for violations can be substantial. In many cases, civil and criminal penalties can exceed several million dollars. Civil penalties vary by sanctions program, and the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalty Inflation Adjustment Act Improvements Act of 2015, requires OFAC to adjust civil monetary penalty amounts annually. For current penalty amounts, see section V.B.2.a of Appendix A to OFAC’s Economic Sanctions Enforcement Guidelines at 31 C.F.R Part 501. [03-08-17]
Frequently Asked Questions listed below may be found by clicking here.
1. What is OFAC and what does it do?
The Office of Foreign Assets Control administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. [09-10-02]
2. How long has OFAC been around?
The Treasury Department has a long history of dealing with sanctions. Dating back prior to the War of 1812, Secretary of the Treasury Gallatin administered sanctions imposed against Great Britain for the harassment of American sailors. During the Civil War, Congress approved a law which prohibited transactions with the Confederacy, called for the forfeiture of goods involved in such transactions, and provided a licensing regime under rules and regulations administered by Treasury.
OFAC is the successor to the Office of Foreign Funds Control (the “FFC”), which was established at the advent of World War II following the German invasion of Norway in 1940. The FFC program was administered by the Secretary of the Treasury throughout the war. The FFC’s initial purpose was to prevent Nazi use of the occupied countries’ holdings of foreign exchange and securities and to prevent forced repatriation of funds belonging to nationals of those countries. These controls were later extended to protect assets of other invaded countries. After the United States formally entered World War II, the FFC played a leading role in economic warfare against the Axis powers by blocking enemy assets and prohibiting foreign trade and financial transactions.
OFAC itself was formally created in December 1950, following the entry of China into the Korean War, when President Truman declared a national emergency and blocked all Chinese and North Korean assets subject to U.S. jurisdiction. [05-02-06]
3. What does one mean by the term “prohibited transactions” ?
Prohibited transactions are trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute. Because each program is based on different foreign policy and national security goals, prohibitions may vary between programs.[06-16-06]
4. Are there exceptions to the prohibitions?
Yes. OFAC regulations often provide general licenses authorizing the performance of certain categories of transactions. OFAC also issues specific licenses on a case-by-case basis under certain limited situations and conditions. Guidance on how to request a specific license is found below and at 31 C.F.R. 501.801. [06-16-06]
5. How do I determine if I have a valid OFAC match?
Please take the following “due diligence” steps in determining a valid OFAC match.
If you are calling about a wire transfer or other “live” transaction:
Step 1. Is the “hit” or “match” against OFAC’s Specially Designated Nationals (SDN) list, one of its other sanctions lists, or targeted countries, or is it “hitting” for some other reason (i.e., “Control List” or “PEP,” “CIA,” “Non-Cooperative Countries and Territories,” “Canadian Consolidated List (OSFI),” “World Bank Debarred Parties,” “Blocked Officials File,” or “government official of a designated country”), or can you not tell what the “hit” is?
- If it’s hitting against OFAC’s SDN list, one of its other sanctions lists, or targeted countries, continue to 2 below.
- If it’s hitting for some other reason, you should contact the “keeper” of whichever other list the match is hitting against. For questions about:
- The Denied Persons List and the Entities List, please contact the Bureau of Industry and Security at the U.S. Department of Commerce at 202-482-4811.
- The FBI’s Most Wanted List or any other FBI-issued watch list, please contact the Federal Bureau of Investigation (http://www.fbi.gov/contact/fo/fo.htm).
- The Debarred Parties list, please contact the Directorate of Defense Trade Controls at the U.S. Department of State, 202-663-1282.
- The Bank Secrecy Act and the USA PATRIOT Act, please contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.
- If you are unsure whom to contact, please contact your screening software provider which told you there was a “hit.”
- If you can’t tell what the “hit” is, you should contact your screening software provider which told you there was a “hit.”
Step 2. Now that you’ve established that the hit is against one of OFAC’s sanctions lists or targeted countries, you must evaluate the quality of the hit. Compare the name in your transactions with the name on the sanctions list. Is the name in your transaction an individual while the name on the sanctions list is a vessel, organization or company (or vice-versa)?
- If yes, you do not have a valid match.*
- If no, please continue to 3 below.
Step 3. How much of the listed entry’s name is matching against the name in your transaction? Is just one of two or more names matching (i.e., just the last name)?
- If yes, you do not have a valid match.*
- If no, please continue to 4 below.
Step 4. Compare the complete sanctions list entry with all of the information you have on the matching name in your transaction. An entry often will have, for example, a full name, address, nationality, passport, tax ID or cedula number, place of birth, date of birth, former names and aliases. Are you missing a lot of this information for the name in your transaction?
- If yes, go back and get more information and then compare your complete information against the entry.
- If no, please continue to 5 below.
Step 5. Are there a number of similarities or exact matches?
- If yes, please call the hotline at 1-800-540-6322.
- If no, you do not have a valid match.*
1) How does Sanctions List Search work?
In addition to returning results that are exact matches (when the match threshold slider bar is set to 100%), Sanctions List Search can also provide a broader set of results using fuzzy logic. This logic uses character and string matching as well as phonetic matching. Only the name field of Sanctions List Search invokes fuzzy logic when the tool is run. The other fields on the tool use character matching logic. Please click here for more information on what a true SDN or sanctions list match is.
2) What does the Sanctions List Search Score mean?
The score field indicates the similarity between the name entered and resulting matches on one of OFAC’s sanctions lists. It is calculated using two matching logic algorithms: one based upon phonetics, and a second based upon the similarity of the characters in the two strings. A score of 100 indicates an exact match, while lower scores indicate potential matches.
3) How do I use the Minimum Name Score field and score slider bar?
The minimum name score field limits the number of names returned by the search. A value of 100 will return only names that exactly match the characters entered into the name field. A value of 50 will return all names that are deemed to be 50% similar based upon the matching logic of the search tool. By lowering the match threshold the system will return a broader result set.
4) How is the Score calculated?
Sanctions List search uses two matching logic algorithms, and two matching logic techniques to calculate the score. The two algorithms are Jaro-Winkler, a string difference algorithm, and Soundex, a phonetic algorithm. The first technique involves using the Jaro-Winkler algorithm to compare the entire name string entered against full name strings of entries on OFAC’s sanctions lists. The second technique involves splitting the name string entered into multiple name parts (for example, John Doe would be split into two name parts). Each name part is then compared to name parts on all of OFAC’s sanctions lists using the Jaro-Winkler and Soundex algorithms. The search calculates a score for each name part entered, and a composite score for all name parts entered. Sanctions List Search uses both techniques each time the search is run, and returns the higher of the two scores in the Score column.
5) Does OFAC recommend a specific match threshold score?
OFAC cannot make such a recommendation because each search has its own unique set of facts surrounding it. Users of Sanctions List Search must make their own match threshold determinations based upon their own internal risk assessments and established compliance practices.
6) What fields influence the score?
Only the name field influences the score.
7) What fields use fuzzy logic?
Only the name field uses the fuzzy searching logic.
8) When conducting a search using the ID field, does Sanctions List Search account for variations in non-alphanumeric characters?
At present, Sanctions List Search’s ID field uses exact character matching to provide users with a result. In order to receive the broadest number of results, users should conduct ID field searches both with and without any non-alphanumeric characters.
9) Who may use Sanctions List Search? Can we configure our automated system to utilize Sanctions List Search on a continual basis?
Sanctions List Search is a free tool provided by OFAC to assist the public in complying with sanctions programs. It is intended to be used by individual users that are looking for potential matches on OFAC’s sanctions lists. It should not be utilized by automated systems that are configured to continually run searches through the tool. For a copy of files that can be easily interpreted by automated systems and software programs, please see the list of XML, CSV, PIP, DEL, and FF files on the SDN and Consolidated Sanctions List pages.
10) Does Sanctions List Search look for potential matches on all of the various sanctions lists that OFAC has published on its website?
Sanctions List Search will look for and return potential matches from the SDN and Consolidated Lists. The user can look under the List column to see which list(s) a potential match is on. Please see the Consolidated List page for more detailed information on what is included in the Consolidated List.
11) Does the Sanctions List Search tool show historic information? For example, does it show names that have been removed from one of OFAC’s sanctions lists?
OFAC’s Sanctions List Search is updated frequently and always contains the latest versions of OFAC’s sanctions lists. Like OFAC’s other list-related publications, Sanctions List Search does not contain historical information. Names that have been removed from OFAC’s Specially Designated Nationals or Consolidated Lists are not included in Sanctions List Search. Likewise, targets that have been updated only appear with their most up to date entry information. For historical information about a target on one of OFAC’s sanctions lists, please see our archive page.