OFAC Basics
What does OFAC stand for?
Office of Foreign Assets Control
What does SDN stand for?
Specially Designated Nationals
What is a comprehensive sanction?
sanction that applies to an entire country or region
Which country has faced long-standing comprehensive U.S. sanctions since 1979?
Iran
What is the maximum civil penalty per OFAC violation?
Up to $356,579 (as of 2023, varies by statute)
Which department oversees OFAC?
U.S. Department of the Treasury
What happens if a person is on the SDN list?
Their assets are blocked and U.S. persons are generally prohibited from dealing with them.
What is a sectoral sanction?
A sanction targeting specific sectors of a country’s economy
What was the reason for sanctions against North Korea?
Nuclear weapons development and human rights abuses
Can individuals be criminally prosecuted for sanctions violations?
Yes
What is the primary role of OFAC?
Administer and enforce economic and trade sanctions
How often is the SDN list updated?
Regularly, as needed (often weekly or monthly)
What is a blocking sanction?
A sanction that freezes assets and prohibits transactions.
What major Chinese telecom company was penalized for sanctions violations?
ZTE
What agency investigates criminal sanctions violations?
U.S. Department of Justice (DOJ)
True or False: OFAC only applies to U.S. citizens.
False – It applies to all persons within the U.S. and U.S. persons globally
Name one type of entity that might appear on the SDN list.
Terrorist organizations, drug traffickers, sanctioned government officials.
What is a secondary sanction?
A sanction that targets non-U.S. persons for doing business with sanctioned entities.
What was the penalty amount in the ZTE case?
Over $1 billion
What is a “voluntary self-disclosure”?
When a company reports its own violation to OFAC
What is the legal authority under which OFAC operates?
International Emergency Economic Powers Act (IEEPA)
What tool can be used to search the SDN list?
OFAC’s Sanctions List Search Tool
What is the difference between primary and secondary sanctions?
Primary apply to U.S. persons; secondary apply to foreign persons engaging with sanctioned parties
What is a key lesson from the ZTE enforcement action?
Importance of internal controls and truthful disclosures to regulators
What are mitigating factors in OFAC enforcement?
Voluntary disclosure, cooperation, strong compliance program