OFAC Sanctions Screening

The Office of Foreign Assets Control (OFAC) is the U.S. Treasury agency (home page: ofac.treasury.gov) that administers and enforces U.S. economic and trade sanctions against targeted foreign countries, regimes, terrorists, international narcotics traffickers, and others. OFAC's primary tool is the Specially Designated Nationals and Blocked Persons List (SDN List) — a roster of individuals, entities, and vessels whose assets must be blocked and with whom U.S. persons are generally prohibited from transacting.

All U.S. financial institutions are required to check customers, beneficial owners, and transactions against the SDN List and other OFAC sanctions lists before transacting. OFAC's regulations apply to 'U.S. persons' broadly — including U.S. companies and their foreign branches. Non-bank businesses also have OFAC obligations when dealing with certain sanctioned countries or parties.

OFAC sanctions programs include country-based programs (Cuba, Iran, North Korea, Russia/Ukraine, Syria) and list-based programs (SDN, Sectoral Sanctions Identifications list, Foreign Sanctions Evaders list). OFAC publishes the full consolidated sanctions list — available for download and API at ofac.treasury.gov/sanctions-list-service — which is updated as often as multiple times per day.

For business borrowers, OFAC screening means: lenders will run your name, business name, beneficial owners, and sometimes business address against the SDN list before approving financing. This is non-negotiable — a match (or near-match requiring investigation) will delay or block funding until cleared. Most matches are false positives resolved by providing additional identity documentation. Willful OFAC violations by financial institutions carry civil penalties up to $1M+ per violation and criminal referral. See ofac.treasury.gov/faqs for OFAC compliance FAQs.