What Are the OFAC Sanctions Lists?

Office of Foreign Assets Control (OFAC) started its 2025 by imposing new sanctions that target Russia’s Gazprom Neft and Surgutneftegas, sanctioning 180 vessels, oil traders, service providers, and key energy officials to disrupt Russia’s oil revenues.

The new decision that permits sanctions under Executive Order (E.O.) 14024 against individuals who operate or have operated in the Russian Federation economy’s energy sector serves as the foundation for these actions.

Wondering why OFAC did that?

Let’s read this article to learn what is OFAC, what are OFAC sanctions, why institutions need to follow the OFAC sanctions checks and more.

What is OFAC?

The U.S. Treasury Department comprises the Office of Foreign Assets Control (OFAC). OFAC oversees the Specially Designated Nationals (SDNs) and Blocked Persons lists, as well as the sanctions and embargo programs of the US government.

SDNs are organizations or people that are owned, managed, or function on behalf of the governments of the target nations. SDNs may potentially be linked to terrorism or international drug trafficking.

Without prior OFAC authorization, U.S. people may be restricted from engaging in specific actions with the individuals and businesses on the list.

What Are OFAC Sanctions?

OFAC meaning ‘Office of Foreign Assets Control’, under the Biden administration has sanctioned 1,621 corporations and 879 individuals to its SDN sanction list in 2023, which is a 10% rise from the sanctioned entities in the year 2022.

Currently, this enforcement agency works as the financial intelligence under the United States Treasury Department.

OFAC search is empowered to target specific foreign entities, organizations (drug cartels, or terror organizations), and states that pose any significant threat to the national security of the United States.

In the second half of 2023, OFAC fined financial institutions a total of $984,851,289.90 for sanctions evasion as per the Global Investigations & Compliance Review

How OFAC Came Into Being?

Back in 1951, when China entered the Korean War (1950-1953), President Harry Truman signed an executive order establishing OFAC, triggering a national emergency in the United States and resulting in the freezing of all Korean and Chinese assets in US jurisdiction.

Previously, OFAC was known as the Division of Foreign Assets Control, which included Foreign Funds Control (FFC) which was created in response to the Nazi invasion of Norway in 1940.

The FCC controlled U.S.-owned assets overseas and foreign-owned assets within the United government during its 1940-47 operation. It also handled the “Black List,” wartime import prohibitions over enemy assets, and wartime trade restrictions with enemy governments.

What is the Purpose of OFAC Sanctions?

OFAC oversees and implements US economic sanctions policies under US economic, national security, and foreign policy goals. The primary goals of these initiatives are:

• The terrorist organizations
• Transnational drug dealers
• Countries and governments that have been sanctioned

The purpose of OFAC is to supervise various sanctions programs that use trade restrictions and asset blocks to accomplish foreign policy and national security goals.

OFAC sanction programs, for instance, address sanctions on North Korea, Cuba, Iran, Russia, and other countries.

Why Do Countries Fear OFAC Sanctions?

OFAC administers sanctions in accordance with US foreign policy. The OFAC’s sanctions are intended to economically isolate the sanctioned country by disrupting its financial sector and the daily lives of its citizens.

Sanctions imposed by OFAC are a coercive mechanism used to pressure a country to change its state policy and comply with international law in order to avert the brutal consequences of economic sanctions.

OFAC also targets terror groups and drug cartels that fund their illegal operations through the sale of various commodities. OFAC detects and disrupts the sources of revenue.

What are the Two Categories of OFAC Sanctions?

OFAC sanctions search falls into two primary categories:

• Primary sanctions prohibit US citizens and organizations from doing business or completing transactions with people, organizations, or nations that OFAC has designated as sanctions targets.
• Secondary sanctions, which target foreign companies, limit financial and economic interactions with those that threaten US foreign policy, national security, or the economy.

OFAC has the authority to freeze assets within US jurisdiction and control the financial activities of individuals on the sanctions list.

How Do OFAC Sanctions Work?

As mentioned earlier, OFAC search oversees the international implementation of the United States government’s embargo programs and economic sanctions.

One of its primary functions also includes maintaining the Specially Designated Nationals (SDNs) and Blocked Persons lists.

Specially Designated Nationals (SDNs) comprise a list of entities or individuals that could be owned or controlled by, or acting for, or on behalf of, the governments of enemy countries.

Additionally, SDNs may be linked to international terrorism or drug trafficking. Without prior OFAC authorization, U.S. people may be restricted from engaging in specific actions with the individuals and businesses on the list.

The OFAC developed thorough guidance for a rigorous compliance program in 2019. Given the increasingly aggressive execution of sanctions in a complex economic system, OFAC provides financial organizations with guidance on best practices for avoiding regulatory fines and complying with US sanctions regimes.

This guideline is more of a road map for how to navigate the complex OFAC sanctions search landscape and prevent sanctions evasion. It also established the standard methods for evaluating firms’ attempts to comply with US sanctions.

What Are Some OFAC Sanctions for different countries?

List of Countries Sanctioned By OFAC

• Russia
• Iran
• Syria
• North Korea
• Cuba
• Some regions of Ukraine like Crimea, Donetsk, and Luhansk.

An Office of Foreign Assets Control (OFAC) license is necessary to conduct the majority of transactions, including those involving individuals or organizations that are “ordinarily resident” in above mentioned nations.

Targeted OFAC Sanctions in Other Countries

The financial transactions of specific groups or entities are sanctioned in the following countries:

Countries Sanctioned By OFAC For Military Exports

Exporting any kind of technical data as well as military or space equipment to the below-mentioned nations or their foreign citizens is prohibited by the U.S. Department of State and violation of this law leads to severe regulatory charges and legal repercussions.

What are the Three Types of OFAC Sanctions?

Following are the three types of OFAC sanctions:

1. Country-Based Sanctions
2. Sectoral Sanctions
3. List-Based Sanctions

Country-Based Sanctions

Country-based sanctions are imposed on the entire country, including members of governments, all citizens, businesses, or any subsidiary of a business that belongs to that country.

The entire economic system and political infrastructure of the country are targeted in line with the U.S. foreign policy objectives.

Financial transactions, technological transfers, and trade in goods and services are among the many activities that are prohibited by these sanctions, which often target particular businesses or sectors within a nation.

There is considerable variation in the scope and types of these sanctions. Countries such as Belarus, Libya, and Sudan, for example, are subject to prohibitions that mainly target transactions concerning particular organizations or persons.

On the other hand, more stringent OFAC regulations apply to other nations, such as Iran, North Korea, and Russia

In 2023, the Office of Foreign Assets Control (OFAC) assessed over $1.5 billion in penalties across 17 resolutions, marking the highest volume of penalties by OFAC.

Sectoral Sanctions

Sectoral sanctions by the OFAC are a new addition to its toolkit. These are usually the targeted sanctions that are designed to focus on specific sections of a country, for example, certain segments or industries that pose a threat to U.S. national security or violate international laws.

Back in 2014, following Russia’s annexation of Crimea, the United States imposed sectoral sanctions on several Russian financial and energy corporations.

Later, following Russia’s invasion of Ukraine in 2022, sectoral sections by the U.S. targeted the Russian financial and energy corporations again to weaken its economy and stop the war.

There are no absolute bans on the organizations listed on a sectoral sanctions identification list. However, these sanctions prohibited US citizens from financing or investing in these companies, thereby cutting off their entry into the US market and banking sector.

List-Based Sanctions

One particular kind of OFAC sanction is list-based sanctions, which involves tracking down and cataloging people, organizations, and entities on the Specially Designated Nationals and Blocked Persons List (SDN List).

All U.S. citizens are forbidden from doing business with those on the list because they are believed to be potential threats to American interests.

This strategy effectively isolates those engaged in terrorism, drug trafficking, violations of human rights, and other nefarious acts from the U.S. economy and banking system.

The 50 Percent Rule of OFAC further states that assets and interests in assets of entities that are directly or indirectly held by one or more blocked individuals are barred to the extent that they account for at least 50 percent of the total.

Additionally, according to OFAC’s 50 Percent Rule, property and interests in property of entities that are directly or indirectly owned by one or more blocked persons to the degree of 50 percent or more in total are also blocked.

What is an OFAC Check?

An OFAC check is an important component of the company’s sanctions program. In addition to economic and trade sanctions, an OFAC sanctions check offers information on national security risks such as terrorists, drug traffickers, and foreign governments.

It establishes whether a person or firm is allowed to operate in the United States.

Now Searching how to fulfill those OFAC checks?

Here is the answer to your search

Consult AML Watcher

Why

Because its data-rich screening solution helps organizations keep up with OFAC rules and proactively control the risks of sanctions violations.

How AML Watcher Can Help Institutions To Stay Compliant With OFAC Sanctions List?

AML Watcher maintains a comprehensive screening database with over 100,000 records, including 3,500+ watchlists and 230+ sanction lists.

It includes 50,000+ adverse media sources and 2.1 million Politically Exposed Persons profiles from 235+ countries, available in 80+ languages.

AML Watcher offers a comprehensive suite of features for OFAC checks to ensure institutions remain fully compliant with OFAC regulations and avoid the substantial risks associated with violations

Real-Time OFAC Sanctions Screening

AML Watcher offers real-time screening against various sanctions lists, including the OFAC SDN list.

It assists organizations in promptly identifying and stopping any transactions involving people or organizations that are subject to OFAC sanctions, ensuring compliance in real-time and lowering the possibility of fines.

Multi-List Sanctions Coverage

Beyond the OFAC SDN list, AML Watcher incorporates screening against several international sanctions lists, such as those from the EU, UN, and other national organizations.

This ensures that organizations don’t unintentionally interact with high-risk organizations and adhere to international sanctions laws.

Continuous Monitoring and Updates

AML Watcher provides continuous monitoring of both existing customers and new transactions, ensuring that any modifications to the OFAC SDN list or other sanctions lists are promptly included in the screening procedure.

Customizable Screening Rules

AML Watcher allows institutions to modify screening procedures to better meet their compliance requirements and OFAC laws. This adaptability gives a customized approach to sanctions screening, improving precision and effectiveness.

Detailed Risk Scoring and Reporting

AML Watcher helps organizations determine the severity of any sanctions violations by assigning a risk score to clients or transactions based on screening results.

Detailed reports and audit trails are also available, making it simpler to record compliance activities and get ready for regulatory reviews or audits pertaining to OFAC compliance.

Accurate Name Screening

Name screening in AML Watcher enables institutions to cross-check customer names against global sanctions lists, and watchlists, including the OFAC SDN list, in real time. This ensures more precise detection of high-risk people and entities.