The United States plays an important role in the international fight against money laundering, terorrism financing, and other financial crimes – and does so by imposing economic sanctions against the countries, entities and individuals engaged in those activities. The United States’ sanctions are implemented and enforced by the Treasury Departments’ Office of Financial Assets Control.
What Is the OFAC Sanctions List?
The OFAC Sanctions list contains information on the current targets of sanctions by the United States. OFAC maintains several sanctions lists, each dealing with a group of targets. The most .of those lists are:
- The Specially Designated Nationals (SDN) List: A list of individuals and companies which are controlled by, or acting on behalf of, countries targeted by United States sanctions.
- The Consolidated Sanctions List: A list containing all sanctions information not incorporated into the SDN list.
Other types of sanctions lists maintained by OFAC include the Sectoral Sanctions Identifications List (targeted at Russia), the Foreign Sanctions Evaders List, and the more specific non-SDN Palestinian Legislative Council List, and the Iranian Sanctions List. OFAC sanctions are implemented in two categories:
- Comprehensive Sanctions: Prohibiting all types of transactions between the US and a sanctioned country – for example, North Korea, Syria or Sudan.
Non-comprehensive Sanctions: Limiting transactions between the US and a specific company, individual, or industry – for example, supporters or financiers of an unfriendly political regime.
Who Has to Comply with OFAC Sanctions?
All individuals, banks, financial services companies and other obligated institutions operating under United States jurisdiction must comply with OFAC sanctions. For banks and other financial services firms, this means integrating an OFAC sanctions search into internal AML/CFT programs, and ensuring that new customers and clients are screened against the list before a business relationship begins.
Sanctions breaches are punishable by fines of up to $20 million, and prison sentences of up to 30 years for individuals involved. OFAC does issue certain sanctions exemptions which can be obtained via application to the Treasury Department.
Why Is it Important to Have a Sanctions Screening Tool?
Performing an OFAC sanctions search manually can be administratively challenging and inefficient. Human error may also lead to inaccuracies and the risk of penalty fines. Using an automated sanctions screening tool minimizes that risk: screening technology not only builds accuracy into AML programs but helps firms to quickly and efficiently achieve the compliance standards that regulators like OFAC require.
Want to find out more about Sanctions Screening?
- Council for Financial Activities Control (COAF)
- HM Revenue and Customs
- Japanese Financial Services Agency
- The Caribbean Financial Action Task Force
- The Egmont Group
- The Financial Intelligence Centre Act
- The Reserve Bank Of New Zealand
- The Unidad de Inteligencia Financiera México
- The United Nations Office on Drugs and Crime (UNODC)
- What Is The AMF – Autorité des Marchés Financiers?
- What Is the European Banking Authority (EBA)?
- What Is The Financial Conduct Authority (FCA)?
- What Is The Hong Kong Monetary Authority?
- What Is The Monetary Authority of Singapore?
- What Is The New York State Department Of Financial Services (NYSDFS)?
- What Is The Office Of The Comptroller Of The Currency?
- What Is The U.S. Securities And Exchange Commission?
- What Is The United States Department Of Justice (DOJ)?