Updated
GL-O-03
Glossary · Due Diligence and compliance
OFAC - Office of Foreign Assets Control
OFAC — the US Treasury Office of Foreign Assets Control, which administers US sanctions and maintains the SDN list.
01 / In 30 seconds
The short answer
- What it is
- OFAC — the US Treasury’s Office of Foreign Assets Control
- What it does
- Administers US sanctions and keeps the SDN List
- Impact
- Global — because of the role of the dollar and the US financial system
- During checks
- Checking against OFAC databases is a mandatory compliance stage
- How to use it
- Check in advance that you are not on OFAC lists
02 / In plain words
What OFAC means
OFAC (Office of Foreign Assets Control) is the US Treasury Department’s office for the control of foreign assets. It is this body that develops, imposes and administers American sanctions: against countries, regimes, organisations and specific individuals. OFAC keeps the key sanctions lists, including the well-known SDN List (Specially Designated Nationals), and monitors compliance with US sanctions programmes.
Although OFAC is an American body, its influence is global. Because of the central role of the dollar in world settlements and the importance of the US financial system, banks, companies and organisations around the world follow OFAC sanctions and avoid dealing with persons on its lists — otherwise they risk losing access to dollar settlements and falling under secondary sanctions. That is why OFAC sanctions are among the most influential in the world.
In investment migration and bank compliance, checking against OFAC databases is a mandatory stage of any serious due diligence. A match with an OFAC sanctions list is a hard deal-breaker for citizenship and accounts. As with other checks, false name matches are possible and need to be cleared properly. We check clients against OFAC lists in advance and help resolve any questions.
A case from practice
A client runs an international business and pays no attention to US sanctions, regarding them as “not their” problem. We explain: because of the role of the dollar, almost any bank in the world checks OFAC’s databases. We check them against the lists in advance, confirm their status is clean — and they open accounts without difficulty.
Where OFAC matters
- Sanctions checks in due diligence
- Opening bank accounts
- International dollar settlements
- Checking clients and partners
- Sanctions risk assessment
- Clearing false name matches
03 / What it covers
What matters about OFAC
What it is
- A US Treasury body
- Administers sanctions
- Keeps lists
Lists
- SDN List
- Sectoral sanctions
- Country programmes
Impact
- Global
- Because of the role of the dollar
- Secondary sanctions
In due diligence
- A mandatory check
- A match is a deal-breaker
- False matches are possible
04 / How it works
How to take OFAC into account
A preliminary OFAC check
Sanctions screening
Reviewing matches
Clearing false positives
A clean result
05 / Key facts
What you need to know
01
OFAC is the US Treasury’s office for the control of assets
02
Administers US sanctions and keeps the SDN List
03
Its influence is global because of the role of the dollar
04
Checking against OFAC is a mandatory compliance stage
05
A match with OFAC sanctions is a hard deal-breaker
Common mistakes
- Assuming OFAC sanctions do not matter outside the US
- Not checking yourself against OFAC lists in advance
- Ignoring the risk of a false name match
- Trying to conceal sanctions status
- Underestimating the threat of secondary sanctions
06 / Expert advice
How to prepare in advance
Before a serious check, confirm that you are not on OFAC’s lists by checking yourself against its databases — bearing in mind that the influence of these sanctions is global. In the event of a false name match, documents are prepared proving that it is not you. Real sanctions status cannot be concealed. We carry out such a preliminary check so that OFAC sanctions do not come up unexpectedly.
What we do for you. We check clients against OFAC lists in advance, understanding that the influence of these sanctions is global — almost every bank in the world takes them into account because of the role of the dollar. In the event of false name matches, we help settle the question with documents. That way the sanctions side of the check goes through cleanly, without unexpected obstacles.
Klara RihterBanking compliance and source of funds specialist
07 / Questions
Frequently asked questions
The Office of Foreign Assets Control — the US Treasury’s office for the control of foreign assets. It administers US sanctions and keeps the key lists, including the SDN List.
Their influence is global: because of the role of the dollar, banks and companies around the world follow OFAC sanctions, fearing the loss of dollar settlements and secondary sanctions.
The main one is the SDN List (specially designated nationals), as well as sectoral sanctions and programmes against particular countries and regimes.
It is a hard deal-breaker: a bank will not open an account, and a reputable programme will not issue a passport to a person under OFAC sanctions. Sanctions status is a serious obstacle.
Yes, on names, with a sanctioned person. They must be cleared properly with documents proving that it is not you — otherwise the process will be held up.
By checking against OFAC databases before applying. We carry out a preliminary check and, in the event of a false match, prepare explanatory documents.
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