What is OFAC Sanctions?
The Office of Foreign Assets Control (OFAC) is an office of the Treasury Department of United States of America (US). OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries, organizations, entities, and individuals. The OFAC sanctions programs are implemented through restrictions on imports and exports, prohibitions on financial transactions, freezing of assets, and other means.
What countries are on OFAC list?
The several OFAC sanctions programs restrict various countries from doing businesses in different levels. Following are the list of countries which are included in any of the sanction programs .
- Burma (Myanmar)
- Western Balkans
- Cote d’Ivoire
- Democratic Republic of the Congo
- Liberia (Former Regime of Charles Taylor)
- Persons Undermining the Sovereignty of Lebanon
- North Korea
Why Indian Banks restrict transaction from OFAC Sanction Countries
- Risk of getting fined by US Treasury and FED. Since 2010 Deutsche Bank, Barclays, RBS, BNP Paribas, CommerzBank, Credit Agricole etc have been fined for violating OFAC sanctions in range of USD $100 Million to USD 8.9 Billion.
- Global banking system and transactions involve Correspondent banks, which could be based out of US or associated with the U.S. banks.
- Cross-border payments could directly or indirectly involve U.S. banks, hence third countries companies or banks, often refuse to conduct transactions with companies / countries on the US sanctions list on account of settlement related issues.
- Sanctions from UN and European Union in line with OFAC Sanctions.