The Office of Foreign Assets Control (OFAC) is a part of the US Department of the Treasury, originally created to prevent Nazi use of occupied countries’ currency and bond holdings. Today, it develops programs to fight modern threats such as rogue regimes, drug traffickers, and terrorists, imposing trade sanctions or freezing bank accounts. Violators can face hefty fines.
The Office of Foreign Assets Control (OFAC) is part of the United States Department of the Treasury (USA). It originated under the administration of President Harry Truman. Since its inception, its goals have broadened to enable the office to help fight crime and deliver justice through the development of programs that negatively impact the assets of foreign criminals. Examples of programs implemented by OFAC include the Specially Designated Nationals (SDN) list, drug trafficking sanctions, and diamond trade sanctions.
The Office of Foreign Assets Control derives from the Office of Foreign Funds Control (FFC). The US Treasury Department says the FFC was a prevention program designed “to prevent Nazi use of the currency and bond holdings of occupied countries and to prevent the forcible repatriation of funds belonging to citizens of those countries.” The Office of Foreign Assets Control, which went into effect in December 1950 under the Truman administration, developed a much broader set of goals.
OFAC focuses on modern threats to society, including rogue regimes, drug traffickers, and terrorists. The process by which this can be achieved can vary. The programs can impose trade sanctions or embargoes or freeze bank accounts that are in US jurisdiction.
Typically, the process begins with executive or regulatory orders regarding a particular issue, such as a terrorist organization’s attempt to purchase weapons of mass destruction. Sometimes the actions taken by the Office of Foreign Assets Control are in coordination with the initiatives of the United Nations (UN) or those of foreign allies. The role of OFAC in such cases is to develop programs that help achieve the intended goal.
OFAC’s actions may have the potential to impact the general public. Some programs, for example, imply that some parties, such as drug traffickers, are subject to prohibited transaction rules. When that happens, the United States loses the right to engage in financial or trade deals with these people. The United States, according to the Treasury Department, can be US citizens and resident aliens located anywhere in the world, persons on US soil, and incorporated entities operating in the United States.
The Office of Foreign Assets Control also performs the monitoring role of the programs it develops. Violators of OFAC programs can face hefty fines. Parties who are commonly involved in international affairs may therefore want to familiarize themselves with the programs of the office and the parties who are subject to those programs. This information is made public on the OFAC website.
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