What Is OFAC? The U.S. Sanctions Agency Explained (2026 Guide)
OFAC (the Office of Foreign Assets Control) is the U.S. Treasury bureau that enforces economic and trade sanctions. It administers the SDN list, issues general and specific licenses, and can impose penalties of up to $20 million per violation. Here’s how it works and what it means for you.
What does OFAC do?
OFAC is a bureau within the U.S. Department of the Treasury responsible for:
- Administering U.S. sanctions programs targeting countries (Cuba, Iran, North Korea, Russia, etc.), terrorist organizations, narcotics traffickers, and proliferators of weapons of mass destruction.
- Maintaining the SDN list (Specially Designated Nationals and Blocked Persons) — the master list of ~12,000 individuals, entities, vessels, and aircraft whose assets are frozen and with whom U.S. persons cannot transact.
- Issuing licenses — both general licenses (blanket authorizations for categories of activity) and specific licenses (case-by-case approvals).
- Enforcing compliance — investigating violations, imposing civil monetary penalties, and referring criminal cases to the Department of Justice.
- Interpreting sanctions regulations through guidance, FAQs, and advisory opinions published on treasury.gov/ofac.
OFAC’s major sanctions programs
Cuba (CACR)
Comprehensive embargo since 1962. Cuban Assets Control Regulations (31 CFR Part 515). Prohibits nearly all trade, investment, travel, and financial transactions. 12 general-license travel categories.
ComprehensiveIran
Comprehensive sanctions. Iranian Transactions and Sanctions Regulations (ITSR). Prohibits most trade and financial transactions. Secondary sanctions on non-U.S. persons.
ComprehensiveRussia / Ukraine
Targeted and sectoral sanctions since 2014 (expanded 2022). Blocks major Russian banks, energy companies, oligarchs. Secondary sanctions on military-industrial supplies.
Targeted + SectoralNorth Korea (DPRK)
Comprehensive embargo. Nearly total trade and financial isolation. Heavy secondary sanctions enforcement against facilitators.
ComprehensiveSyria
Comprehensive embargo. Syrian Sanctions Regulations. Caesar Syria Civilian Protection Act adds secondary sanctions.
ComprehensiveOFAC administers 30+ programs total, including counter-terrorism (SDT/SDGT), counter-narcotics (Kingpin Act), cyber, non-proliferation, and more.
The SDN list explained
What is the SDN list?
- The Specially Designated Nationals and Blocked Persons List (SDN) is OFAC’s primary enforcement tool.
- Lists ~12,000 individuals, companies, vessels, aircraft, and crypto wallets.
- All assets of SDN-listed parties within U.S. jurisdiction are frozen.
- U.S. persons (and often non-U.S. persons for secondary sanctions) are prohibited from any dealings with SDN parties.
- The 50% Rule: any entity 50%+ owned by one or more SDN-listed persons is itself treated as blocked, even if not explicitly on the list.
- Banks, payment processors, and compliance teams screen all transactions against the SDN daily.
OFAC penalties
| Type | Maximum Penalty | Notes |
|---|---|---|
| Civil (strict liability) | Up to ~$330,000 per violation or twice the transaction value | No intent required. “Should have known” standard. Most common enforcement. |
| Criminal (willful) | Up to $20,000,000 fine + 20 years imprisonment | Requires willful violation. DOJ prosecution. Rare for individuals; used for institutional evasion. |
| Warning / no-action letter | $0 | First-time, low-value, self-disclosed. Most common outcome for individual travelers. |
Notable settlements: BNP Paribas ($963M, 2014 — Cuba/Sudan/Iran), Société Générale ($54M, 2018 — Cuba), Standard Chartered ($1.1B, 2019 — Iran/Cuba/Myanmar).
OFAC and Cuba: how it applies
Cuba is one of OFAC’s comprehensive sanctions programs — meaning virtually all transactions are prohibited unless specifically authorized. Key Cuba-specific OFAC tools:
- 12 General Licenses for travel (§515.560–.578) — the only legal way for Americans to visit Cuba
- Cuba SDN designations — 77 currently designated individuals, entities, and vessels
- Cuba Restricted List (CRL) — 247 State Department-listed entities (GAESA, CIMEX, Gaviota, etc.)
- Cuba Prohibited Accommodations List (CPAL) — 431 hotels and lodging properties banned for U.S. persons
- Helms-Burton Act — Title III confiscated-property lawsuits (activated 2019)
- Cuba embargo — the comprehensive regulatory framework since 1962
Frequently asked questions
What does OFAC stand for?
OFAC stands for the Office of Foreign Assets Control. It is a bureau within the U.S. Department of the Treasury, headquartered in Washington, D.C. OFAC was established in 1950 (successor to the WWII-era Office of Foreign Funds Control) and is responsible for administering and enforcing U.S. economic and trade sanctions.
What is OFAC compliance?
OFAC compliance refers to the processes businesses use to ensure they do not violate U.S. sanctions. This typically includes: screening customers, counterparties, and transactions against the SDN list; implementing a written sanctions compliance program (SCP); training employees; conducting due diligence on new business relationships; filing blocked-property or rejected-transaction reports; and self-disclosing any potential violations. Banks, fintech companies, exporters, insurers, law firms, and any business with international exposure must maintain OFAC compliance.
Is Cuba sanctioned by OFAC?
Yes. Cuba is under one of OFAC’s most restrictive programs — a comprehensive embargo enforced through the Cuban Assets Control Regulations (31 CFR Part 515). Nearly all trade, investment, travel, and financial transactions between U.S. persons and Cuba are prohibited unless specifically authorized by a general license or individual specific license. Cuba is also designated as a State Sponsor of Terrorism, which compounds banking and aid restrictions.
What happens if you violate OFAC sanctions?
Penalties depend on severity: warning letters for minor, self-disclosed violations; civil monetary penalties up to ~$330,000 per violation (or twice the transaction value, whichever is greater) under strict liability; and criminal prosecution for willful violations (up to $20 million fine and 20 years imprisonment). OFAC considers factors like voluntary self-disclosure, compliance program quality, cooperation, and remediation when determining penalties.
How do I check if someone is on the OFAC list?
Use OFAC’s official Sanctions List Search tool on treasury.gov, or use our Cuba SDN checker for Cuba-specific searches with fuzzy matching. For comprehensive compliance, many organizations use commercial screening tools (Dow Jones, Refinitiv World-Check, LexisNexis) that integrate the SDN, sectoral lists, non-SDN lists, and international sanctions from the EU, UK, and UN.
Does OFAC apply to non-U.S. persons?
Increasingly, yes. “Secondary sanctions” allow OFAC to penalize non-U.S. persons who facilitate significant transactions with sanctioned parties. This is most aggressively enforced for Iran and Russia programs. For Cuba, secondary sanctions are limited, but any transaction that touches the U.S. financial system (USD clearing, U.S. correspondent banks) brings non-U.S. parties under OFAC jurisdiction. The EU, UK, and Canada have their own sanctions regimes that non-U.S. persons must also comply with.
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