OFAC may focus on a particular issue, such as a terrorist organization’s attempt to purchase weapons of mass destruction.
The Office of Foreign Assets Control (OFAC) is part of the United States (US) Treasury Department. 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 negatively impact the assets of foreign criminal parties. Examples of programs that OFAC has implemented include the Specially Designated Nationals (SDN) List, the Narcotics Trafficking Sanctions, and the Diamond Trading Sanctions.
The Office of Foreign Assets Control is derived from the Office of Foreign Funds Control (FFC). The US Treasury Department claims that the FFC was a prevention program designed “to prevent the Nazi use of foreign currency holdings and bonds from occupied countries and to prevent the forced repatriation of funds belonging to citizens of those countries.” . The Office of Foreign Assets Control, which came into being in December 1950 under the Truman administration, developed a much broader set of goals.
OFAC focuses on threats to modern society, including rogue regimes, drug traffickers, and terrorists. The process by which this is achieved can vary. The programs may impose trade sanctions or embargoes or freeze bank accounts under US jurisdiction.
The process typically begins with executive orders or laws related to 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 United Nations (UN) or foreign allied initiatives. 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 this happens, Americans lose the right to engage in financial or business dealings with these people. Americans, according to the Treasury Department, can be US citizens and aliens residing anywhere in the world, persons on US soil, and incorporated entities operating in the United States.
The Office of Foreign Assets Control also plays a role in monitoring the programs it develops. Violators of OFAC programs can face heavy fines. Therefore, parties that are commonly involved in international affairs may want to familiarize themselves with the office’s programs and the parties subject to them. This information is posted on the OFAC website.