What is OFAC? OFAC Sanctions Screening Explained

OFAC stands for the Office of Foreign Assets Control. It is a US government agency under the Department of the Treasury that administers and enforces economic and trade sanctions against targeted foreign countries, individuals, entities, and organisations. The OFAC Specially Designated Nationals (SDN) list is one of the most widely referenced sanctions lists in global compliance.

Businesses that transact with individuals or entities on the OFAC SDN list, or that facilitate transactions involving sanctioned countries, are subject to severe civil and criminal penalties. This applies not only to US companies but to any business that processes US dollar transactions or has a nexus to the US financial system.

OFAC screening involves checking a customer's name, date of birth, and other identifiers against the SDN list and other OFAC-maintained lists before and during a business relationship. Most regulated businesses perform this check at onboarding and on an ongoing basis to catch any changes to OFAC's lists.