OFAC Check Definition

The Office of Foreign Asset Control (OFAC) Check is a division under the U.S. Department of Treasury that determines if a foreign business entity can be allowed to do business with the United States. The United States bases its economic and trade sanctions on the U.S. Foreign Policy and National Security Goals. The U.S. Foreign Policy and the National Security Goals protect the United States from targeted foreign countries and organizations, terrorists, international drug traffickers, those engaged in creating weapons of mass destruction (WMD), and other potential transnational organized crimes. These potential transnational organized crimes like money laundering and terrorist financing are aimed at harming the U.S. national security, economy, or foreign policy.

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OFAC Checks

OFAC Check Objectives

The Office of Foreign Asset Control (OFAC) Check is looking for the following targeted groups who are:

  • International narcotics traffickers
  • Terrorists
  • Diamond traders
  • Threats to national security, economy, or foreign policy
  • Involved in the rapid creation of weapons of mass destruction


The Office of Foreign Asset Control (OFAC) checks for countries with trade and asset restrictions:

  • Afghanistan
  • Balkans
  • Belarus
  • Burma
  • Central Africa
  • China
  • Congo
  • Cuba
  • Ethiopia
  • Hong Kong
  • Iran
  • Iraq
  • Lebanon
  • Libya
  • Mali
  • Nicaragua
  • North Korea
  • Russia
  • Somalia
  • Sudan
  • Syria
  • Ukraine
  • Venezuela
  • Yemen
  • Zimbabwe


The Office of Foreign Asset Control (OFAC) checks for targeted businesses who are involved in:

  • Credit reporting services
  • Export and import services
  • Money services
  • Financial services
  • Insurance services
  • Legal and Compliance Services
  • Non-government organizations / Non – Profit
  • Virtual currency services


The Office of Foreign Asset Control (OFAC) publishes the Specially Designated Nationals and Blocked Persons List (SDN). The Specially Designated Nationals and Blocked Persons List includes individuals and companies who are controlled by or acting for, or on behalf of the targeted countries. These individuals and companies can also belong to the targeted groups and entities like terrorists and drug traffickers that are not country-specific.

OFAC Screening Process

The Office of Foreign Asset Control (OFAC) screening works through the Sanctions List Search. The sanction list search is used to facilitate the use of the Specially Designated Nationals and Blocked Persons List (SDN List) and other sanctions lists. Other sanction lists by the Office of Foreign Asset Control (OFAC) include:

  • Foreign Sanctions Evaders List
  • Sectoral Sanctions Identifications List
  • Consolidated Sanctions List
  • List of Foreign Financial Institutions Subject to Part 561
  • List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions
  • Non-SDN Palestinian Legislative Council List
  • Non-SDN Iranian Sanctions List
  • Non-SDN Menu-Based Sanctions List
  • Non-SDN Communist Chinese Military Companies List


The sanctions list tool utilizes an approximate string-matching method to identify possible matches between word or character strings entered into the Sanctions List Search. The Sanctions List Search has a feature called Minimum Name Score. Minimum Name Score functions as a sliding scale to set the fuzziness rating or the closeness of any potential match result from a user’s search. This user’s search feature allows the Sanctions List Search to identify misspellings or other texts that are incorrectly inputted.

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Who Needs To Check OFAC?

U.S. Based organizations need to check OFAC and comply with OFAC regulations. OFAC regulations include all U.S. citizens and permanent resident aliens, and all U.S. incorporated companies, including their branches around the world. These companies include:
‍

  • U.S. Banks
  • Bank holding companies
  • Non-bank companies

OFAC Background Check Providers

The Office of Foreign Asset Control (OFAC) under the Department of Treasury provides the OFAC background checks. The background checks involve criminal background checks. Criminal background checks use the Specially Designated Nationals and Block Persons List (SDN List).

iSoftpull is a leading provider of OFAC checks, allowing users to add OFAC checks to any credit report pulled using iSoftpull’s credit reporting software.

OFAC Check API

iSoftpull offers an OFAC Check API solution. The OFAC Check API provides an automated method of searching the U.S. Treasury’s Office of Foreign Asset Control’s List. The Office of Foreign Asset Control’s List protects the parties involved from potential problems involving trade and asset sanctions targets. These sanction targets are individuals or companies in the OFAC’s Specially Designated Nationals and Block Persons List (SDN List).

iSoftpull OFAC Check API is part of iSoftpull Identity Risk Management Suite. The iSoftpull Identify Risk Management Suite is essential for online lenders to protect them from fraudsters. These fraudsters can be identified by detecting:
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  • True name and synthetic fraud
  • Application velocity
  • Identity relational and behavioral anomalies
  • SSNs belonging to deceased persons or minors
  • Consumer statements on credit files
  • Identity verification issues
  • Social security number issuance and misuse
  • Address misuse
  • Phone number misuse
  • Synthetic fraud
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OFAC Timing

The Office of Foreign Asset Control (OFAC) should be checked on a regular basis on the OFAC’s website. The OFAC’s website contains the updated sanctions list for individuals or businesses. The individuals’ or businesses’ complete information are essential for getting complete information about the latest restrictions. These latest restrictions can affect the countries and entities that are potential business partners.

OFAC Check Requirements

The Office of Foreign Asset Control (OFAC) Check Requirements are crucial for financial institutions. Financial institutions are obliged to make Anti-Money Laundering (AML) checks on account openings, money transfers, and private banking transactions. Account openings must fulfill the Know Your Customer (KYC) and Customer Due Diligence obligations. These obligations are implemented by the Office of the Comptroller of the Currency (OCC) through the Bank Secrecy Act (BSA). The Bank Secrecy Act was amended to integrate provisions from the USA Patriot Act. The USA Patriot Act requires banks to adopt a customer identification program. The OCC and the U.S. Department of Treasury issue Financial Crimes Enforcement Network (FinCEN) advisories for individuals or entities that are engaged in money laundering activities.

Money laundering activities are also suppressed by the Foreign Account Tax Compliance Act (FACTA). The Foreign Account Tax Compliance Act (FACTA) requires foreign entities to disclose the foreign assets held by their U.S. account holders. The U.S. account holders are also required to report the value of their foreign financial accounts and foreign assets.

Transactions Are Subject To OFAC Regulations

Every transaction that a U.S. financial institution does is subject to OFAC regulations. The OFAC regulations state that if a bank has knowledge that a target is part of the transaction, the bank’s transaction process would be a blocked transaction. A blocked transaction is when money from an OFAC-specified country is transferred through a U.S. bank. U.S. banks must block transactions that are:

  • By or on behalf of a targeted individual or entity
  • To go or go through a targeted individual or entity
  • Related to a transaction in which a targeted individual or entity has interest

The OFAC can authorize certain transactions by issuing certain licenses on a case-by-case basis. This case-by-case basis is when a prohibited transaction is determined to not undermine the U.S. Policy objectives or to be justified by the U.S. national security or foreign policy objectives. This transaction is given a specific license. A specific license is a written document that authorizes a particular transaction for a specified period by the OFAC. The OFAC can grant this kind of license upon granting an application submitted to them.The OFAC regulations, when violated, incur heavy fines. These heavy fines can be up to several million dollars for criminal and civil penalties. Civil penalties are dependent on the sanctions program and the Federal Civil Penalties Inflation Adjustment Act of 1990.

The OFAC Rules

The Office of Foreign Asset Control (OFAC) Rules and Regulations are managed by the U.S. Department of the Treasury through the Office of Foreign Asset Control (OFAC). The Office of Foreign Asset Control (OFAC) controls the economic trade with foreign countries and implements economic trade sanctions and trade bans. These economic trade sanctions and trade bans are based on foreign policy, national security concerns, or international treaty agreements.The Office of Foreign Asset Control (OFAC) regulations also define prohibited transactions. Prohibited transactions include:

  • Transactions involving designated foreign countries or nationals
  • Transactions with respect to securities registered in the name of a designated national
  • Importation and dealings in certain merchandise
  • Holding certain kinds of blocked property in interest-bearing accounts

The Office of Foreign Asset Control (OFAC) sanctions contain partial and full trade embargoes that are separately enforced from other U.S. export control law penalties. The trade embargoes’ additional information is found in the Sanctions Programs and Country Information Area.

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