OFAC SDN List Compliance FAQ

Q.  What is the OFAC SDN list?

A.  The Office of Foreign Assets Control administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers.  The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals.

To help businesses and individuals avoid sanctions violations, the Treasury Dept. publishes a list of entities called the OFAC SDN (Specially Designated Nationals) list.

Doing business with entities on the OFAC SDN list can result in extremely large fines and other penalties, including loss of export privileges or prison.

Treasury Dept website:   OFAC Frequently Asked Questions

Q.  Which businesses need to pay attention to the OFAC list?

A.  All U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches.

Treasury Dept website:   Who Must Comply With OFAC

Q.  How much can fines for sanctions violations be?

A.  The fines for violations can be substantial.  Depending on the program, criminal penalties can include fines ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30 years for willful violations.  Depending on the program, civil penalties range from $11,000 to $1,000,000 for each violation.

As an example, in August of 2007, the government announced that Travelocity.com had paid a settlement of $182,750 for a sanction violation.  A number of other companies were fined over $200,000 in 2007 alone.

Treasury Dept website:   Fines For OFAC Violations

Q.  How come I haven't heard of this before?

A.  Government sanctions have existed for many years, but since the terrorist attacks of September 11, 2001 the Federal government has dramatically increased its use of watch lists.  The government considers watch lists like OFAC to be a valuable weapon against terrorist and criminal organizations.

Q.  How can I ensure that my business stays in compliance?

A.  Verifilter continually monitors the relevant government watch lists, collecting them into a single, easy-to-search master list.  Subscribe to our service and you'll get instant access to our search facilities, including web-based checking and easy integration into your own web site.

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