Financial Crime World

Treasury Department Warns of Broad Sanctions Prohibitions

The Office of Foreign Assets Control (OFAC) has issued a stern warning to individuals and entities operating under US jurisdiction: the sanctions prohibitions are far-reaching and apply regardless of whether an entity itself is listed on the Specially Designated Nationals and Blocked Persons (SDN List).

OFAC’s Sanctions Programs

According to OFAC, even if a person or entity is not directly listed on the SDN List, their property and interests in property may still be blocked if they are 50 percent or more owned, either individually or collectively, by one or more blocked persons. This means that individuals and entities must carefully review their ownership structures to ensure compliance with OFAC’s sanctions programs.

Broad Prohibitions

The warning comes as part of OFAC’s efforts to educate the public about the scope and breadth of its sanctions programs. The agency administers a number of economic sanctions programs that target specific individuals, entities, and countries, and prohibits certain types of transactions and dealings with listed parties.

  • These sanctions programs are designed to prevent the proliferation of weapons of mass destruction, support terrorist activities, and address other national security concerns.
  • OFAC maintains multiple sanctions lists with different prohibitions associated with them. However, the agency stresses that even if an entity is not listed on any of its sanctions lists, it may still be subject to blocking if it has a significant ownership stake in a blocked person or entity.

Consequences of Non-Compliance

Failure to comply with OFAC’s regulations and executive orders, including Executive Order 13413 and Executive Order 13671, can result in severe penalties, including:

  • Civil monetary penalties
  • Criminal fines

What You Can Do

Individuals and entities operating under US jurisdiction are advised to take the following steps to ensure compliance with OFAC’s sanctions programs:

  • Review the details of any given sanctions program to understand its scope and applicability.
  • Regularly check OFAC’s website for updates on changes to its sanctions programs.
  • Sign up for email notifications regarding these changes.

For more information about OFAC’s sanctions programs or to report potential violations, individuals can contact the agency at (202) 622-2490 or visit its website at www.treasury.gov/ofac.