The Office of Foreign Assets Control (OFAC) is part of the United States (US) Department of the Treasury. It came into existence under the administration of President Harry Truman. Since its inception, its goals have expanded to enable the office to help fight crime and deliver justice by developing programs that have a negative impact on the assets of criminal foreign parties. Examples of programs that OFAC has implemented include the Specially Designated Nationals (SDN) List, Counter Narcotics Trafficking Sanctions, and Diamond Trading Sanctions.
The Office of Foreign Assets Control stems from the Office of Foreign Funds Control (FFC). The US Department of the Treasury says that the FFC was a prevention program designed “to prevent Nazi use of the occupied countries' holdings of foreign exchange and securities and to prevent forced repatriation of funds belonging to nationals of those countries.” The Office of Foreign Assets Control, which came into existence in December 1950 under the Truman administration, has developed a much wider set of goals.
OFAC focuses on modern societal threats, which include rogue regimes, drug traffickers, and terrorists. The process by which this is achieved may vary. Programs may impose sanctions or trade embargoes or freeze bank accounts that are in US jurisdiction.
Generally, the process begins with either executive orders or legislation regarding a certain 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 United Nations (UN) initiatives or those of foreign allies. The role of OFAC in these instances is to develop programs that help meet the intended goal.
OFAC's actions may have the potential to affect the general public. Certain programs, for example, involve subjecting certain parties, such as drug traffickers, to prohibited transaction rules. When this happens, US people lose their right to engage in financial or trade deals with these individuals. US people, according to the Department of the Treasury, can be US citizens and resident aliens who are anywhere in the world, people on US soil, and incorporated entities operating in the US.
The Office of Foreign Assets Control also plays the role of monitoring the programs it develops. Violators of OFAC programs can face hefty fines. Parties who commonly engage in international affairs may, therefore, want to familiarize themselves with the office's programs and the parties who are subject to them. This information is made public on the OFAC website.
