US Department of Treasury, Office of Foreign Assets Control (OFAC), based on US foreign policy and national security, prohibits the transfer of anything of value and the provision of services to countries subject to US sanctions without a license.

All US persons must comply with OFAC regulations including all US citizens and permanent resident aliens whereever located, all persons and entities within the US, and all US incorporated entities and their foreign branches. Certain rules such as those regarding Cuba and North Korea also require all foreign subsidiaries owned or controlled by US companies to comply. Under certain circumstances, foreign persons in possession of US origin goods must comply also. Last but not least, OFAC sanctions also apply to foreign-owned companies with offices in the US.

Violations of OFAC rules may have severe consequences criminal fines up to USD 1 million per violation and 10 years imprisonment. Civil fines are between USD 12.000 and USD 55.000 per violation.

OFAC administers the Specially Designated Nationals (SDN) list, which seem to be identical to the Blocked Persons List. It contains “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific”.

The OFAC Resource Center contains a list of recent OFAC actions, which clearly signifies an active enforcement of regulation and enforcement.

The OFAC was officially created in 1950, when China entered the Korean War. President Truman declared the event a national emergency, and froze all Chinese and Korean assets subject to US jurisdiction. The OFAC’s predecessor was the Office of Foreign Funds Control (OFFC), which was established in response to the Nazi invasion of Norway in 1940. Actually, Treasury has administered sanctions dating 200 years back. Prior to the War of 1812, Treasury Secretary at the time – Albert Gallatin – administered sanctions imposed against Great Britain for the harassment of American sailors.