The Office of Foreign Assets Control (OFAC) is part of the US Department of the Treasury and aims to fight crime and deliver justice by developing programs that negatively impact the assets of criminal third parties, such as trade sanctions and freezing bank accounts. OFAC’s actions may affect the general public and violators can face heavy fines.
The Office of Foreign Assets Control (OFAC) is part of the United States (US) Department of the Treasury. It came into existence under the administration of President Harry Truman. Since its inception, its goals have expanded to allow the office to help fight crime and deliver justice by developing programs that have a negative impact on the assets of criminal third parties. Examples of programs that OFAC has implemented include the Specially Designated Nationals List (SDN), Anti-Narcotics Sanctions, and Diamond Trading Sanctions.
The Office of Foreign Assets Control is derived from the Office of Foreign Funds Control (FFC). The US Department of the Treasury says the FFC was a prevention program designed to “prevent the Nazi use of foreign currency and securities from occupied countries and prevent the forced repatriation of funds belonging to nationals of these countries”. The Office of Foreign Assets Control, which emerged in December 1950 under the Truman administration, developed a much broader set of objectives.
OFAC focuses on the threats of modern society, which include rogue regimes, drug traffickers and terrorists. The process by which this is achieved can vary. Programs may impose trade sanctions or embargoes or freeze bank accounts that are in US jurisdiction.
The process usually begins with executive orders or legislation relating to a particular issue, such as a terrorist organization’s attempt to purchase weapons of mass destruction. At times, the actions of the Office of Foreign Assets Control are in coordination with initiatives by the United Nations (UN) or foreign allies. OFAC’s role in these cases is to develop programs that help achieve the intended objective.
OFAC’s actions may have the potential to affect the general public. Certain programs, for example, involve subjecting certain parties, such as drug dealers, to prohibited transaction rules. When that happens, the people of the US lose the right to engage in financial or commercial dealings with these individuals. The people of the US, according to the Department of the Treasury, can be citizens and aliens residing anywhere in the world, persons on US soil, and incorporated entities operating in the US.
The Foreign Assets Control Office also plays the role of monitoring the programs it develops. Violators of OFAC programs can face heavy fines. Parties that normally engage in international affairs may therefore want to familiarize themselves with the office’s programs and the parties that are subject to them. This information is made public on the OFAC website.
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