Office of Foreign Assets Control

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Template:Short description Template:Use American English Template:Infobox government agency

The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the United States Treasury Department. It administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy objectives.[1] Under presidential national emergency powers, OFAC carries out its activities against foreign governments, organizations (including terrorist groups and drug cartels), and individuals deemed a threat to U.S. national security.[2]

Founded in 1950 as the Division of Foreign Assets Control, since 2004 OFAC has operated under the Office of Terrorism and Financial Intelligence within the Treasury Department. It is primarily composed of intelligence targeters and lawyers. While many of OFAC's targets are broadly set by the White House, most individual cases are developed as a result of investigations by OFAC's Office of Global Targeting (OGT).[3]

Sometimes described as one of the "most powerful yet unknown" government agencies,[3][4] OFAC has the power to levy significant penalties against entities that defy its directives, including imposing fines, freezing assets, and barring parties from operating in the U.S.

History

Involvement of the U.S. Department of the Treasury in economic sanctions against foreign states dates to the War of 1812, when Secretary Albert Gallatin administered sanctions against the United Kingdom in retaliation for the impressment of American sailors.[2][5]

Predecessor agencies of the Division of Foreign Assets Control include Foreign Funds Control (FFC), which existed from 1940 to 1947, and the Office of International Finance (1947 to 1950).[6][7] FFC was established by Executive Order 8389 as a unit of the Office of the Secretary of the Treasury on April 10, 1940. The authority to establish FFC was derived from the Trading with the Enemy Act 1917. Among other operations, FFC administered wartime import controls over enemy assets and restrictions on trade with enemy states. It also participated in administering the Proclaimed List of Certain Blocked Nationals, or the "Black List", and took censuses of foreign-owned assets in the US and American-owned assets abroad. FFC was abolished in 1947, with its functions transferred to the newly established Office of International Finance (OIF). In 1948, OIF activities relating to blocked foreign funds were transferred to the Office of Alien Property, an agency within the Department of Justice.[8]

The Division of Foreign Assets Control, OFAC's immediate predecessor, was established in the Office of International Finance by a Treasury Department order in December 1950, following the entry of the People's Republic of China into the Korean War;[7] President Harry S. Truman declared a national emergency and tasked the Division with blocking all Chinese and North Korean assets subject to U.S. jurisdiction. The Division also administered regulations and orders issued under the amended Trading with the Enemy Act.[5] On October 15, 1962, by a Treasury Department order, the Division of Foreign Assets Control became the Office of Foreign Assets Control.[8]

Authority and activities

File:Treasury Annex.JPG
OFAC is headquartered in the Freedman's Bank Building, located across the street from the Treasury Building in Washington, D.C.

In addition to the Trading with the Enemy Act and the various national emergencies currently in effect, OFAC derives its authority from a variety of U.S. federal laws, particularly the International Emergency Economic Powers Act (IEEPA), regarding embargoes and economic sanctions.[9]

In enforcing economic sanctions, OFAC acts to prevent "prohibited transactions", which are described by OFAC as "trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute". OFAC has the authority to grant exemptions to prohibitions on such transactions, either by issuing a general license for certain categories of transactions, or by specific licenses issued on a case-by-case basis.[5]

Under the International Emergency Economic Powers Act (IEEPA), the U.S. President can block the removal of foreign assets under U.S. jurisdiction during national emergencies. OFAC executes this mandate by issuing regulations to financial institutions.[10]

As part of its efforts to support the Iraq sanctions, in 2005, OFAC fined Voices in the Wilderness $20,000 for gifting medicine and other humanitarian supplies to Iraqis.[11] In a similar case, OFAC imposed and attempted to collect a $10,000 fine, plus interest, against peace activist Bert Sacks for taking medicine to residents of Basra;[12] charges against Sacks were dismissed by the court in December 2012.[13]

In October 2007, a set of Spanish travel agency websites had their domain name access disabled by eNom: the domain names had been on the OFAC blacklist.[14][15] When queried, the U.S. Treasury referred to a 2004 press release that claimed the company "had helped Americans evade restrictions on travel to Cuba".[14]

In the case of United States v. Banki, on June 5, 2010, a U.S. citizen was convicted of violating sanctions against Iran by failing to request Iranian currency transfer licenses in advance from OFAC. On August 25, 2010, the Iranian American Bar Association announced that it would file an amicus curiae brief with the Court of Appeals for the Second Circuit in United States v. Banki.[16] It has also hired lawyers to request further guidance from OFAC on import of goods from Iran.[17]

In 2014, OFAC reached a record $963 million settlement with the French bank BNP Paribas, which was a portion of an $8.9 billion penalty imposed in relation to the case as a whole.[18][19]

Appointment as OFAC director is not subject to Senate confirmation.[20]

Specially Designated Nationals

Script error: No such module "Labelled list hatnote". OFAC publishes a list of Specially Designated Nationals (SDNs), which lists people, organizations, and vessels with whom U.S. citizens and permanent residents are prohibited from doing business.[5] This list differs from the list maintained pursuant to Section 314(a) of the Patriot Act.[21]

In August 2009, a federal court ruling in KindHearts v. Treasury found that Treasury's seizure of KindHearts assets without notice or means of appeal was a violation of the Fourth and Fifth Amendments to the Constitution.[22]

On September 23, 2011, the Ninth Circuit Court of Appeals upheld a lower court's ruling that procedures used by the Treasury to shut down the Oregon-based Al Haramain Islamic Foundation in 2004 were unconstitutional. The court said the Fifth Amendment's guarantee of due process required the Treasury to give adequate notice of the reasons it puts a group on the terrorist list, as well as a meaningful opportunity to respond. In addition, the court ruled that freezing the group's assets amounts to a seizure under the Fourth Amendment, so that a court order is required.[23]

As of October 7, 2015, the SDN List had more than 15,200 entries from 155 countries. Of those, 178 entries were for aircraft and 575 entries were for ships ("vessels"). The remaining 14,467 entries were for designated individuals and organizations.[24] OFAC creates separate entries in the SDN list for each alias of a designee, so the number of entries does not reflect the number of designees.[2]

On September 21, 2021, a cryptocurrency exchange was included in the sanctions list for first time for helping launder illicit funds having source from ransomware attacks. The amounts laundered are more than $160 million between 2018 and 2021.[25]

Sectoral Sanctions Identifications

OFAC publishes a list of Sectoral Sanctions Identifications (SSI), which lists persons, companies, and entities in sectors of the Russian economy (especially energy, finance, and armaments), prohibiting certain types of activity with these individuals or entities by US persons, wherever located.[26] This list is maintained following the issuance of EO 13662 Blocking Property of Additional Persons Contributing to the Situation in Ukraine on March 20, 2014, in accordance with 79 FR 16167.[27]

On August 13, 2014, the Treasury Department issued guidance for entities under sectoral sanctions. It increased the number of entities on the sectoral sanctions identifications list by adding subsidiaries of entities under sectoral sanctions that hold 50% or greater ownership by an entity under sectoral sanctions either individually or in the aggregate, either directly or indirectly. Further, US persons cannot use a third party intermediary and must exercise caution during "transactions with a non-blocked entity in which one or more blocked persons has a significant ownership interest that is less than 50% or which one or more blocked persons may control by means other than a majority ownership interest."[28]

On December 22, 2015, the Treasury Department explicitly listed all entities and their subsidiaries on the sectoral sanctions identifications list using a human readable search.[29][30][31]

Sanctions programs

Script error: No such module "Unsubst". As of August 8, 2020, OFAC was administering the following sanctions programs:[32]

Table note: The numbers of individuals, companies, vessels, and aircraft are taken from the SDN List. However, any single entry on that list may be a target of multiple sanctions programs, so summing lines of the table will inflate the true sum due to duplication.

Tag Last updated Sanctions program Individuals Companies Vessels Aircraft 31 CFR CFR date EO EO

date

[561LIST] Iran Financial – – – – 561[33]
[BALKANS] Balkans related[34] 229 – – – 588[35][36] 13304[37]
[BELARUS] Belarus 208 – – – 548 13405
[BPI-PA] Patriot Act[38] – – – –
[BPI-SDNTK] Narcotics related[39] – – – – 598
[BURMA] Myanmar related 219 – – – 537 13448,

13464

[CAR] Central African Republic 39 – – – 553
[COTED] Côte d'Ivoire 9 – – – 543
[CUBA] Cuban Assets Control 220 – 5 – 515
[CYBER] Computer hacking related – – – – 13694[40]
[DARFUR] Darfur 28 3 – – 546
[DPRK] North Korea 7 44 20 – 510 13551
[DPRK2] North Korea related 10 16 – – 13687
[DRCONGO] Democratic Republic of the Congo 106 27 – – 547 13413, 13671 October 27, 2006
July 8, 2014[41]
[EO13622] Iran related 17 6 – – 13622[42]
[EO13645] Iran related 9 10 9 – 13645[43]
[FSE-IR] Iran sanctions evaders 3 2 – – 13608[44]
[FSE-SY] Syria sanctions evaders – – – – 13608[44]
[FSE-WMD] WMD related[45] – – – – 13608[44]
[FSE-SDGT] Terrorism related[46] – – – – 13608[44]
[FTO] Terrorism related[47] – 552 – – 597
[GLOMAG] Global Magnitsky Sanctions Regulations[48] – 552 – – 597
[HK-EO13936] Hong Kong-Related Sanctions[49][50] 11 – – – – 13936[51]
[HRIT-IR] Iran human rights – 26 – – 13606[52]
[HRIT-SY] Syria human rights 2 6 – – 13606[52]
[IFCA] Iran related[53] – – – –
[IFSR] Iranian Financial 239 857 – 60 561
[IRAN] Iranian Transactions 19 416 175 – 560
[IRAN-HR] Iran related 54 37 – – 13553[54]
[IRAN-TRA] Iran related 16 45 – – 13628[55]
[IRAQ2] Iraq related 287 84 – – 13315,

13350

[IRAQ3] Iraq related 102 48 – – 13438
[IRGC] Iranian Financial 112 120 – 38 561
[ISA] Iran Act 3 17 – – 13574
[JADE] Myanmar Jade[56] – – – –
[LEBANON] Lebanon 13 – – – 549 13441
[LIBERIA] Former Liberian Regime of Charles Taylor 45 70 – – 593
[LIBYA2] Libya related 134 3 – – 570
[MAGNIT] Magnitsky Act[57] 54 – – –
[NPWMD] WMD related[58] 211 892 351 76 544
[NS-ISA] Iran related[59] – – – – 13574
[NS-PLC] Palestinian License[60] – – – – 594[61]
[SDGT] Terrorism related[62] 3,015 1,963 – 101 594
[SDNT] Narcotics related[63] 436 511 – – 536
[SDNTK] Narcotics related[64] 2102 1125 5 – 598
[SDT] Terrorism 63 143 – – 595
[SOMALIA] Somalia 199 20 – – 551
[SUDAN] Sudan related – 223 – – 538
[SOUTH SUDAN] South Sudan – – – – 558 13664
[SYRIA] Syria related 235 180 10 38 542 13399,

13460

[TCO] Transnational Criminal Organizations 201 41 – – 590 13581[65]
[UKRAINE-EO13660] Ukraine related 193 31 – – 13660[66]
[UKRAINE-EO13661] Ukraine related 95 144 – – 13661[67]
[UKRAINE-EO13662] Ukraine related – – – – 13662[68]
[UKRAINE-EO13685] Ukraine related – 42 – – 13685[69]
[VENEZUELA] Venezuela related 7 – – – 13692[70]
[YEMEN] Yemen 23 – – – 552
[ZIMBABWE] Zimbabwe 121 119 – – 541[71] 13391,

13469

Security incidents

In December 2024, Chinese state-sponsored hackers breached OFAC systems through cybersecurity vendor BeyondTrust, gaining access to unclassified administrative records containing potential sanctions deliberation information and future targets. This incident, described by Treasury officials as "major" and also affecting the Office of the Treasury Secretary and Office of Financial Research, marked the second known PRC intrusion into OFAC, following a breach in the early 2000s that compromised general counsel office emails.[72][73] In response, on January 17, 2025, OFAC sanctioned Yin Kecheng, a Shanghai-based hacker affiliated with China's Ministry of State Security allegedly responsible for the compromise.[74][75]

See also

Further reading

References

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External links

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Template:US Treasury agencies Template:Authority control

  1. ↑ Script error: No such module "Citation/CS1".
  2. ↑ a b c Script error: No such module "citation/CS1".
  3. ↑ a b Yukhananov, Anna, and Warren Strobel, "After Success on Iran, U.S. Treasury's Sanctions Team Faces New Challenges", Reuters, April 14, 2014.
  4. ↑ Rubenfeld, Samuel. "OFAC Rises as Sanctions Become A Major Policy Tool", Wall Street Journal, February 5, 2014
  5. ↑ a b c d Script error: No such module "citation/CS1".
  6. ↑ Script error: No such module "citation/CS1".
  7. ↑ a b Script error: No such module "citation/CS1".
  8. ↑ a b Script error: No such module "citation/CS1".
  9. ↑ For example Template:Executive Order, Template:Executive Order, etc.
  10. ↑ Script error: No such module "citation/CS1".
  11. ↑ Script error: No such module "citation/CS1".
  12. ↑ Script error: No such module "citation/CS1".
  13. ↑ Ramsey, Bruce Template:Webarchive "Bert Sacks: No fine and no court time for Iraqi sanctions"; The Seattle Times; 3 Jan 2012.
  14. ↑ a b Script error: No such module "citation/CS1".
  15. ↑ Script error: No such module "citation/CS1".
  16. ↑ "IABA to File Amicus Brief in Appeal Before Second Circuit". Template:Webarchive
  17. ↑ "IABA Hires Lawyers to Request Further Guidance from OFAC". Template:Webarchive
  18. ↑ Script error: No such module "citation/CS1".
  19. ↑ "Treasury Reaches Largest Ever Sanctions-Related Settlement with BNP Paribas SA for $963 Million". U.S. Department of the Treasury, June 30, 2014
  20. ↑ Rubenfeld, Samuel, "U.S. Treasury Appoints OFAC Director Without Fanfare", Wall Street Journal, March 17, 2017. First public mention: March 14, 2017. Retrieved 2017-03-17.
  21. ↑ Erich Ferrari, "IP Services Under The ITSR: A Broad Exception?" Template:Webarchive, Sanction Law, Ferrari & Associates, 12 February 2018
  22. ↑ Script error: No such module "citation/CS1".
  23. ↑ Script error: No such module "citation/CS1".
  24. ↑ Script error: No such module "citation/CS1".
  25. ↑ Script error: No such module "citation/CS1".Template:Dead link
  26. ↑ Script error: No such module "citation/CS1".
  27. ↑ Script error: No such module "citation/CS1".
  28. ↑ Script error: No such module "citation/CS1".
  29. ↑ Script error: No such module "citation/CS1".
  30. ↑ Script error: No such module "citation/CS1".
  31. ↑ Script error: No such module "citation/CS1".
  32. ↑ Script error: No such module "citation/CS1".
  33. ↑ Script error: No such module "citation/CS1".
  34. ↑ "Western Balkans Stabilization"
  35. ↑ Script error: No such module "citation/CS1".
  36. ↑ Script error: No such module "citation/CS1".
  37. ↑ Script error: No such module "Citation/CS1".
  38. ↑ Blocked pending investigation
  39. ↑ "Foreign Narcotics Kingpin", blocked pending investigation
  40. ↑ Script error: No such module "Citation/CS1".
  41. ↑ Script error: No such module "citation/CS1".
  42. ↑ Script error: No such module "Citation/CS1".
  43. ↑ Script error: No such module "Citation/CS1".
  44. ↑ a b c d Script error: No such module "Citation/CS1".
  45. ↑ "Non Proliferation sanctions evaders"
  46. ↑ "Anti-terrorism sanctions evaders"
  47. ↑ "Foreign Terrorist Organizations"
  48. ↑ "Magnitsky Act"
  49. ↑ Script error: No such module "citation/CS1".
  50. ↑ Script error: No such module "citation/CS1".
  51. ↑ Script error: No such module "citation/CS1".
  52. ↑ a b Script error: No such module "Citation/CS1".
  53. ↑ Iran Freedom and Counter-Proliferation Act of 2012, PL 112-239
  54. ↑ Script error: No such module "Citation/CS1".
  55. ↑ Script error: No such module "Citation/CS1".
  56. ↑ Script error: No such module "Citation/CS1".
  57. ↑ Sergei Magnitsky Rule of Law Accountability Act of 2012, PL 112-208
  58. ↑ "Weapons of Mass Destruction Proliferators"
  59. ↑ Non-SDN Iranian Act
  60. ↑ Script error: No such module "citation/CS1".
  61. ↑ Script error: No such module "citation/CS1".
  62. ↑ "Global Terrorism"
  63. ↑ "Narcotics Trafficking"
  64. ↑ "Foreign Narcotics Kingpin"
  65. ↑ Script error: No such module "Citation/CS1".
  66. ↑ Script error: No such module "Citation/CS1".
  67. ↑ Script error: No such module "Citation/CS1".
  68. ↑ Script error: No such module "Citation/CS1". Script error: No such module "citation/CS1". Script error: No such module "citation/CS1". Script error: No such module "citation/CS1". Script error: No such module "citation/CS1".
  69. ↑ Script error: No such module "Citation/CS1".
  70. ↑ Script error: No such module "Citation/CS1".
  71. ↑ also 70 FR 71201 and 73 FR 43841
  72. ↑ Script error: No such module "citation/CS1".
  73. ↑ Script error: No such module "citation/CS1".
  74. ↑ Script error: No such module "citation/CS1".
  75. ↑ Script error: No such module "citation/CS1".
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