The OFAC was established in 1950, during the Korean War, as part of the United States’ efforts to freeze North Korean assets and prevent the movement of military equipment and weapons into the country. Since then, the scope of the OFAC’s responsibilities has expanded significantly, as it has taken on additional responsibilities related to the enforcement of economic sanctions against countries such as Iran, Russia, and North Korea, as well as against terrorist organisations and individuals.
The OFAC has the authority to impose economic sanctions on individuals, companies, and countries that are considered a threat to national security. This includes freezing assets, prohibiting transactions, and blocking property. The OFAC also maintains a list of Specially Designated Nationals and Blocked Persons (SDNs), which includes individuals and companies that have been designated by the U.S. government as being involved in activities that pose a threat to national security.
One of the primary tools used by the OFAC is the issuance of sanctions and embargoes. Sanctions are typically economic measures that restrict trade and commerce with a targeted country or organisation. Embargoes, on the other hand, are more comprehensive and typically involve a ban on all trade and commerce with the targeted country or organisation. Sanctions and embargoes can be imposed for a variety of reasons, including human rights abuses, nuclear proliferation, and support for terrorist organisations.
In addition to imposing sanctions and embargoes, the OFAC also enforces compliance with these measures. Companies and individuals who violate OFAC regulations can face significant fines and penalties, as well as criminal charges. The OFAC also works closely with other agencies, such as the Department of Homeland Security and the Department of Justice, to ensure that those who violate U.S. economic sanctions are held accountable.