The Office of Foreign Assets Control (OFAC), a division of the U.S. Treasury, administers and enforces sanctions and programs against foreign countries,
organizations, and individuals that sponsor terrorism, narcotics trafficking, and the proliferation of weapons of mass destruction.
OFAC programs include controlling export and other financial transactions, as well as freezing foreign assets. The Specially Designated Nationals and Blocked Persons (SDN) list of companies,
organizations and individuals U.S. persons are prohibited from dealing with and whose assets are blocked is published and regularly updated by OFAC. Like most publically available lists, for high levels of compliance certainty the OFAC SDN list requires pre-processing with specialized technologies that verify, optimize and structure it for subsequent use in screening applications and integrations.
If the data isn't pre-processed, screening results do not meet purpose standards. more +
Specially Designated Nationals and Blocked Persons (SDNs) are individuals and entities located throughout the world that are blocked pursuant to the various sanctions programs administered by U.S. Treasury's Office of Foreign Assets Control (OFAC). SDNs can be front companies,
parastatal entities, or individuals determined to be owned or controlled by, or acting for or on behalf of, targeted countries or groups. They also can be specially identified individuals such as terrorists or narcotics traffickers.
U.S. persons are prohibited from engaging in any transactions with SDNs and must block any property in their possession or under their control in which an SDN has an interest.
SDNs are designated primarily under the statutory authority of the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Anti-Terrorism and Effective Death Penalty Act, the Foreign Narcotics Kingpin Designation Act, and the USA Patriot Act.
Implementing regulations can be found in Chapter V, Title 31 of the U.S. Code of Federal Regulations.
OFAC Sanctions on Iran
Iran is among a number of countries (including Burma, Cuba and Sudan) under OFAC sanctions. Iran is frequently in the international spot light, with a recent development being new sanctions signed into law by the Obama Administration which bar foreign financial institutions
from the U.S. banking system if they conduct or facilitate significant financial transactions with the Central Bank of Iran or other designated Iranian banks.
The new Iran Sanctions are embodied in the National Defense Authorization Act for Fiscal Year 2012, which was signed into law on December 31st, 2011. The law requires the U.S. President to sanction foreign financial institutions that facilitate significant transactions with Iranian banks, in particular with regards to oil transactions.
Specifically, this law can result in the freezing of any property in which an Iranian bank has an interest. OFAC will take the position that any involvement of an Iranian bank in a transaction will most likely create an interest.
Which companies are subject to OFAC regulations?
All U.S. persons are subject to and must comply with OFAC regulations. However, companies and organizations traditionally considered most at risk include those defined by FinCEN as "financial services" providers, those producing, buying,
selling or conducting research on export controlled goods and services, and companies that provide supply chain or logistics services to the aforementioned organizations.
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Note that the definition of a U.S. person includes all U.S. citizens and permanent resident aliens regardless where in the world they are located, and all U.S. incorporated entities.
Under certain OFAC programs, all foreign subsidiaries owned or controlled by U.S. companies must comply, as well as foreign entities in possession of U.S. origin goods.
How much are the fines for violating OFAC regulations?
Depending on the OFAC program, criminal penalties can include fines ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30 years.
Civil penalties range from $250,000 or twice the amount of each underlying transaction to $1,075,000 for each violation.
How does Visual Compliance Help?
With terrorism and drug trafficking on the rise, it is essential that you ensure you are not doing business with individuals or firms prohibited by the United States. Unless you acquire a ready-fit OFAC solution,
ensuring you can maintain and prove compliance requires considerable IT resources. more +
Your IT would need to develop the automated means of downloading the (potentially) daily updates to the SDN list and create applications to screen all parties at the multiple business process points within your organization that generate or process transactions.
They would also need to work with your Compliance Department to develop the business processes and invent automated applications to resolve matches to the SDN list without bringing your operations to its knees sorting through false positives. You would probably want IT to develop case management,
audit and recordkeeping functionality so you can quickly clear potential matches, and prove your due diligence. A batch screening application would be needed to help you get up and running quickly.
And a web-based interface for the times you don't have access to your other solutions, or for functions that aren't already automated.
Visual Compliance solutions integrate the OFAC regulatory processes into your current business processes to help you achieve the compliance level specific to your industry and stay up-to-date with changes to OFAC regulations.
- Solution Advantages more +
Meeting OFAC and other counter-terrorism financing (CTF) and anti-money laundering (AML) regulatory requirements can be costly; failing to comply can be even more expensive,
impacting your brand value, your bottom line, and your executives' liberty.
Visual Compliance helps you streamline and simplify your trade and financial compliance efforts, helping you cost-effectively:
- Comply with OFAC, USA PATRIOT Act, and Sarbanes-Oxley regulations
- Screen against U.S. government and international watch lists to help deter crimes such as terrorism and money laundering
- Prevent violations of country embargoes and sanctions
- Reduce training costs with superbly designed user-centric intuitive interfaces, integrated help and process-driven workflows
- Integrate screening into your business processes for greater efficiencies
- Realize a quick return on investment consequent to your staff getting more done and focusing on what matters
- Key Features more +
With more than 30 years of trade and financial compliance automation expertise, Visual Compliance solutions provide the functionality,
flexibility and accuracy to cost-effectively manage rapidly changing compliance regulations.
- Robust, comprehensive compliance management functionality
- Advanced data preparation techniques for faultlessly accurate content, updated daily
- Real-time entity and country screening
- Secure internet-based technologies plus optional built-in integration capabilities for SAP, Oracle and other ERP environments, eCommerce and legacy applications
- Bulk-processing with self-serve and full service options
- Audit recording, escalated notifications and alerts, and dynamic re-screening
- Sophisticated and relevant matching algorithms that significantly reduce false positives
- Risk Country alerts for problem countries in entity searches, independent of the entity being screened
- User-centric workflows and intuitive interfaces for quick learning curve, rapid uptake and reduced training costs
- Comprehensive set of selectable U.S. and international regulatory watch lists PLUS the ability to easily include internal watch lists
- Robust, flexible case management tools
- Compliance and management reporting with drill-down access to granular data
- Up-to-date and fully searchable laws, regulations, orders, guidelines and contacts
- Highly scalable architecture
- Advanced, industry-standard security features
- Comprehensive Watch Lists more +
The OFAC SDN is just one of the U.S. and international lists you need to screen against. The following is a partial selection of the lists offered by Visual Compliance. To discuss your specific needs,
call 1-877-328-7866 and talk to one of our OFAC compliance consultants or send an email
- Department of Treasury (OFAC) Specially Designated Nationals and Blocked Persons list (SDN list)
- Department of Treasury (OFAC) Specially Designated Terrorist Organizations and Individuals
- Department of Treasury (OFAC) Specially Designated Narcotic Traffickers and Narcotics Kingpins
- Department of Treasury (OFAC) Foreign Narcotics Kingpins
- Department of Treasury Palestinian Legislative Council List (PLC)
- Department of Commerce (BIS) Denied Persons List
- Department of Commerce (BIS) Entity List
- Department of Commerce (BIS) Unverified List
- Department of State Designated Terrorist Organizations
- Department of State Terrorist Exclusion List (TEL)
- Department of State Arms Export Control Act Debarred Parties
- Department of State International Traffic In Arms Regulations Munitions Export Control Orders
- Foreign Persons Designated Under the Weapons of Mass Destruction Trade Control Regulations
- U.S. General Services Administration (GSA) List of Parties Excluded from Federal Procurement, Reciprocal and Nonprocurement Programs
- FBI Most Wanted Terrorists
- U.S. Secret Service — Most Wanted
- Australia Department of Foreign Affairs and Trade Consolidated List
- Bank of England Consolidated List of Financial Sanctions Targets
- Canada Public Safety and Emergency Preparedness Listed Entities
- OSFI Consolidated List (Canada)
- Consolidated List of Persons, Groups and Entities Subject to E.U. Financial Sanctions
- Patriot Act Section 311
- Politically Exposed Persons (PEP)
- World Bank Listing of Ineligible Firms
- United Nations Consolidated List
For more Information
For more information, call toll-free 1-877-328-7866 and talk to one of our financial services or OFAC compliance consultants. They'll help you analyze your requirements, evaluate your options, and provide focused demonstrations.
Or send an email.
Visual Compliance provides robust, cost-effective automation solutions and regulatory content to manage all of aspects of foreign trade compliance. With over 30 years of experience helping companies easily gain control and visibility over their compliance issues and processes,
our solutions are relied on by more than 4,000 companies at home, and abroad.
