OFAC Best Practises For Effective Compliance

On 23 Aug., 2021

OFAC is the US Treasury Department's financial intelligence and enforcement department.

OFAC Best Practises For Effective Compliance

What Is OFAC & It’s Regulations?

OFAC is the US Treasury Department's financial intelligence and enforcement department. It is in charge of implementing and enforcing economic and trade sanctions in support of US national security and foreign policy goals. OFAC is largely staffed by intelligence officers and attorneys and is part of the Treasury Department's Office of Terrorism and Financial Intelligence. Economic and trade sanctions are administered and enforced by the Office of Foreign Assets Control (OFAC) in accordance with US foreign policy and national security objectives. The Office of Foreign Assets Control (OFAC) is in responsible of enacting sanctions against the following:

Targeted foreign countries and regimes.
International narcotics traffickers.
Those involved in activities that threaten the United States' national security, foreign policy, or economics, such as the spread of weapons of mass destruction.

Economic Sanctions :

Economic and trade sanctions are tools used by one country to compel, discourage, penalise, or disgrace another country, organisation, or individual to change their policies, actions, or behaviours. Terrorism, worldwide drugs trafficking, human rights violations, cybercrime, uncontrolled nuclear weapons, military aggressiveness, and many more issues exist in today's globe. The OFAC sanction lists include :

Specially Designated Nationals (SDN) list
Consolidated Sanctions List
Cuba Sanctions
Iran Sanctions
Ukraine-/Russia-Related Sanctions
Syria Sanctions
Counter Terrorism Sanctions
Counter Narcotics Trafficking Sanctions

A complete list of sanctions programs is available on the OFAC website. Get access to the most recent Restricted party screening data now at Linqsdata.com.

Consequences of Non-Compliance -

Noncompliance with OFAC laws might have a major impact on your capacity to conduct future transactions, since you could face hefty fines and even jail time. Compliance isn't only for major businesses; small and medium-sized exporters are also held accountable. There is no such thing as "too small to be seen" when it comes to compliance. To satisfy their export-control duties, all firms must undertake thorough watch list screening.

OFAC Screening Practices

OFAC screening isn't as easy as comparing a name to a file on your computer. The following best practises are crucial for achieving compliance.

Review the Specially Designated Nationals

The Specially Designated Nationals (SDN) List is a list of businesses and people owned or controlled by, or working for or on behalf of, targeted nations. Individuals, organisations, and entities such as terrorists and narcotics traffickers that have been designated under non-country-specific procedures are also included on this list. SDNs' assets are blocked, and U.S. citizens are typically forbidden from interacting with them. For exports or reexports to any party in any item on this list that has any of the suffixes SDGT, SDT, FTO, IRAQ2, or NPWMD, the EAR requires a licence. Every export shipment should be checked against the list of Specially Designated Nationals.

OFAC’s 50 percent rule

The 50 Percent Rule prohibits property and interests in businesses held 50 percent or more by Treasury Department sanctioned parties, even if they are not named on the list. The 50 Percent Rule's most recent development currently states that the rule applies when an entity is controlled by more than one individual under the SDN list and the aggregate total is greater than 50%. Because of the 50 Percent Rule, OFAC compliance screening entails more than just searching up names of persons or organisations on a list; it also entails determining ownership.

Use Denied Party Screening Software -

The easiest approach to guarantee you're following the best practises for OFAC compliance every time you export is to use denied party screening software. The Restricted Party Screening software from Linqsdata is OFAC-compliant software that tackles the concerns mentioned above. Rather than checking each list one by one, this programme allows you to examine more than 150 lists at once, all from the comfort of your own computer.

Linqsdata is a prominent export compliance software service provider, providing web-based software solutions for restricted party screening to businesses and organisations. To know more visit the website linqsdata.com.

Author Bio:-

Linqsdata is an international trade compliance expert and writes on export controls, denied party screening, export classification, EAR, ITAR, deemed export and encryption items.