What is OFAC?
It's the U.S. Treasury's Office of Foreign Assets Control. Under OFAC regulations, most trade with sanctioned or embargoed countries is illegal, as is doing any kind of business with individuals, organizations or companies named as Specially Designated Nationals (SDN) by OFAC and placed on the Sanctioned Party List (SPL) or as Foreign Sanctions Evaders as placed on the FSE list. Companies of all sizes providing goods or services to any foreign customer must screen their transactions to ensure they comply.
The U.S. government and its trade control agencies are ramping up their efforts to protect national security and punish those who would break their laws. Consider that since January 2010, OFAC has handed out an incredible $300 million in civil penalties alone for violations. Criminal penalties range as high as 30 years in prison.
Moreover, every month U.S. government agencies designate hundreds of terrorists, drug dealers and others with whom no transaction is legal.
Compliance is not an option—it's the law. Companies that do not perform due diligence to ensure their business practices are in line with regulations will face severe repercussions.