Office of Foreign Assets Control
Encyclopedia
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
under the auspices of the Under Secretary of the Treasury for Terrorism and Financial Intelligence. OFAC administers and enforces economic and trade sanctions
Economic sanctions
Economic sanctions are domestic penalties applied by one country on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas...
based on U.S. foreign policy and national security
National security
National security is the requirement to maintain the survival of the state through the use of economic, diplomacy, power projection and political power. The concept developed mostly in the United States of America after World War II...
goals against targeted foreign states, organizations, and individuals.
The current director of OFAC is Adam J. Szubin.
History
Involvement of the U.S. Department of the Treasury in economic sanctions against foreign states dates to the War of 1812War of 1812
The War of 1812 was a military conflict fought between the forces of the United States of America and those of the British Empire. The Americans declared war in 1812 for several reasons, including trade restrictions because of Britain's ongoing war with France, impressment of American merchant...
, when Secretary Albert Gallatin
Albert Gallatin
Abraham Alfonse Albert Gallatin was a Swiss-American ethnologist, linguist, politician, diplomat, congressman, and the longest-serving United States Secretary of the Treasury. In 1831, he founded the University of the City of New York...
administered sanctions against Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
in retaliation for the harassment
Impressment
Impressment, colloquially, "the Press", was the act of taking men into a navy by force and without notice. It was used by the Royal Navy, beginning in 1664 and during the 18th and early 19th centuries, in wartime, as a means of crewing warships, although legal sanction for the practice goes back to...
of American sailors.
The Division of Foreign Assets Control, the immediate predecessor to OFAC, was established in December 1950. Predecessor agencies of the Division of Foreign Assets Control include Foreign Funds Control, which existed from 1940 to 1947, and the Office of International Finance (1947 to 1950). OFAC's earliest predecessor, Foreign Funds Control, was established by Executive Order 8389
Executive Order 8389
Executive Order 8389 Protecting Funds of Victims of Aggression was issued by President of United States Franklin D. Roosevelt on April 10, 1940, following the invasions of Denmark and Norway by Nazi Germany.-Implementation of the Order:...
as a unit of the Office of the Secretary of the Treasury on April 10, 1940. The authority to establish Foreign Funds Control was derived from the Trading with the Enemy Act 1917. Among other operations, Foreign Funds Control administered wartime import controls over enemy assets and restrictions on trade with enemy states. It also participated in administering the Proclaimed List of Certain Blocked Nationals, or the "Black List", and took censuses of foreign-owned assets in the United States and American-owned assets abroad. Foreign Funds Control was abolished in 1947, with its functions transferred to the newly established Office of International Finance (OIF). In 1948, OIF activities relating to blocked foreign funds were transferred to the Office of Alien Property, an agency within the Department of Justice
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
.
The Division of Foreign Assets Control was established in the Office of International Finance by a Treasury Department order in 1950, following the entry of the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
into the Korean War
Korean War
The Korean War was a conventional war between South Korea, supported by the United Nations, and North Korea, supported by the People's Republic of China , with military material aid from the Soviet Union...
; President Harry S Truman declared a national emergency and blocked all Chinese and North Korean assets subject to U.S. jurisdiction. In addition to blocking Chinese and North Korean assets, the Division administered and certain regulations and orders issued under the amended Trading with the Enemy Act.
On October 15, 1962, by a Treasury Department order, the Division of Foreign Assets Control became the Office of Foreign Assets Control.
Authority and activities
In addition to the Trading with the Enemy Act, OFAC derives its authority from a variety of U.S. federal laws regarding embargoEmbargo
An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is...
es and economic sanctions. See United States embargoes for a list of affected countries.
In enforcing economic sanctions, OFAC acts to prevent "prohibited transactions," which are described by OFAC as trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute. OFAC has the authority to grant exemptions to prohibitions on such transactions, either by issuing a general license for certain categories of transactions, or by specific licenses issued on a case-by-case basis.
OFAC administers and enforces economic sanctions programs against countries, businesses or groups of individuals, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals.
Under the International Emergency Economic Powers Act
International Emergency Economic Powers Act
The International Emergency Economic Powers Act , Title II of , is a United States federal law authorizing the President to regulate commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has a foreign source.-Provisions:In the...
, the President of the United States
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
is empowered during emergency situations to block the removal of foreign assets under the jurisdiction of the United States. That mandate is then executed by OFAC through issue of regulations that direct financial institutions accordingly.
Between 1994 and 2003, OFAC collected over $8m in violations of the Cuban embargo
United States embargo against Cuba
The United States embargo against Cuba is a commercial, economic, and financial embargo partially imposed on Cuba in October 1960...
, against just under $10,000 for terrorism financing violations. It had ten times more agents assigned to tracking financial activities relating to Cuba than to Osama Bin Laden
Osama bin Laden
Osama bin Mohammed bin Awad bin Laden was the founder of the militant Islamist organization Al-Qaeda, the jihadist organization responsible for the September 11 attacks on the United States and numerous other mass-casualty attacks against civilian and military targets...
.
As part of its efforts to support the Iraq sanctions
Iraq sanctions
The Iraq sanctions were a near-total financial and trade embargo imposed by the United Nations Security Council on the nation of Iraq. They began August 6, 1990, four days after Iraq's invasion of Kuwait, stayed largely in force until May 2003 , and certain portions including reparations to Kuwait...
, in 2005 OFAC fined Voices in the Wilderness
Voices in the Wilderness
Masada Anniversary Edition Volume 2: Voices in the Wilderness is the second album in a series of five releases celebrating the 10th anniversary of John Zorn's Masada songbook project....
$20,000 for gifting medicine and other humanitarian supplies to Iraqis. In a similar case, OFAC is still attempting to collect (as of 2011) a $10,000 fine, plus interest, against Bert Sacks for bringing medicine to residents of Basra
Basra
Basra is the capital of Basra Governorate, in southern Iraq near Kuwait and Iran. It had an estimated population of two million as of 2009...
.
In the case of United States v. Banki
United States v. Banki
On January 7, 2010, the U.S. Attorney for the Southern District of New York announced that naturalized U.S. citizen Mahmoud Reza Banki, born in Iran, had been arrested for criminal violations of the Iran Trade Embargo. On March 17, 2010, the US Attorney filed an indictment in United States...
, on June 5, 2010, a U.S. citizen was convicted of violating the Iran Trade Embargo for failing to request Iranian currency transfer licenses in advance from OFAC. On August 25, 2010, the Iranian American Bar Association
Iranian American Bar Association
The Iranian American Bar Association was formed in 2000 in the District of Columbia and is a tax-exempt, non-profit organization under section 501 of the Internal Revenue Code.-Background:...
announced that it would file an amicus curiae
Amicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
brief with the United States Court of Appeals for the Second Circuit
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
on United States v. Banki. It has also hired lawyers to request further guidance from OFAC on import of goods from Iran.
Specially Designated Nationals List
The Specially Designated Nationals (SDN) List is a publication of OFAC which lists individuals and organizations with whom United States citizens and permanent residents are prohibited from doing business. This list differs from the one maintained pursuant to Section 314(a) of the USA PATRIOT Act.Thousands of individuals and companies are currently designated on the OFAC SDN List including the following:
- Abd al-Hadi al-Iraqi
- Abdel Majid al-Zindani
- Abu Hafs Al MauritaniaAbu Hafs Al MauritaniaSheikh Mahfouz Ould al-Walid is an Islamic religious scholar and author associated with al-Qaeda. A veteran of the Soviet war in Afghanistan, he has he been active in Afghanistan, where he tried to build an advanced religious school called the Institute of Islamic Studies in Kandahar, Afghanistan...
- Abu SayyafAbu SayyafAbu Sayyaf also known as al-Harakat al-Islamiyya is one of several military Islamist separatist groups based in and around the southern Philippines, in Bangsamoro where for almost 30 years various Muslim groups have been engaged in an insurgency for an independent province in the country...
- Abu ZubaydahAbu ZubaydahAbu Zubaydah is a Saudi Arabian citizen, sentenced to death in Jordan and currently held in U.S. custody in Guantanamo Bay, Cuba.Not neutral: Arrested in Pakistan in March 2002, he has been in US custody for more than eight years, four-and-a-half of them spent incommunicado in solitary confinement...
- Aden-Abyan Islamic ArmyAden-Abyan Islamic ArmyThe Aden-Abyan Islamic Army is an Islamist militant organization based in southern Yemen. The group was responsible for kidnapping of 16 foreign tourists in the December 1998 in Abyan. Yemeni government forces attacked place where the hostages were being held resulting in four of the hostages...
- Al-Aqsa FoundationAl-Aqsa FoundationThe al-Aqsa Foundation is an international charity with alleged ties to the Palestinian militant organisation Hamas. The head office of the foundation was located in Germany until it was closed by the German authorities in July 2002...
- Al-Aqsa Martyrs' BrigadesAl-Aqsa Martyrs' BrigadesThe al-Aqsa Martyrs' Brigades is a coalition of Palestinian nationalist militias in the West Bank. The group's name refers to the al-Aqsa Mosque in Jerusalem...
- Al-BarakatAl-Barakatal-Barakat or al-Barakaat , which means "Blessings" in Arabic, is a group of companies established in Somalia in 1986. Al-Barakat has involved itself in the modern form of hawala, an informal value transfer system, and the remittance trade. By 2001, it was operating in 40 countries and was the...
- Al-Haramain FoundationAl-Haramain FoundationAl-Haramain Islamic Foundation was a charity foundation, based in Saudi Arabia, alleged by the U.S. Department of the Treasury in a September 2004 press release to have "direct links" with Osama bin Laden...
- Al-Itihaad al-IslamiyaAl-Itihaad al-IslamiyaAl-Itihaad al-Islamiya or AIAI is a defunct Islamist militant group in Somalia that was added to the U.S. list of terrorist organizations on September 24, 2001...
- Al-ManarAl-ManarAl-Manar is a Lebanese satellite television station affiliated with Hezbollah, registered as Lebanese Media Group Company, broadcasting from Beirut, Lebanon. It has an offering a "rich menu" of high production news, commentary, and entertainment. The self-proclaimed "Station of the Resistance" ,...
- Al-NourAl-NourAl-Nour is a pro-Hezbollah radio station based in Beirut, Lebanon. The station was established on 9 May 1988.In July 2006 during the Israel-Lebanon crisis, Israel attacked Hezbollah's TV station Al-Manar and radio station Al-Nour in Haret Hreyk .-Objectives:Al Nour has stated its objectives...
- Al-QaedaAl-QaedaAl-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
- Al-Qaeda Organization in the Islamic MaghrebAl-Qaeda Organization in the Islamic MaghrebThe Al-Qaeda Organization in the Islamic Maghreb, previously known as the Salafist Group for Preaching and Combat is a radical Islamist militia which aims to overthrow the Algerian government and institute an Islamic state. To that end, it is currently engaged in an insurgent campaign.The group...
- Al-Shabaab
- Al Taqwa BankAl Taqwa BankThe Al Taqwa Bank is a financial institution incorporated in 1988. It is based out of The Bahamas, Switzerland, and Liechtenstein...
- Al Wafa al Igatha al IslamiaAl Wafa al Igatha al IslamiaAl Wafa is an Islamic charity listed in Executive Order 13224 as an entity that supports terrorism.United States intelligence officials state that it was founded in Afghanistan by Adil Zamil Abdull Mohssin Al Zamil,Abdul Aziz al-Matrafi and Samar Khand....
- Amari SaifiAmari SaifiAmari Saifi , also known under his aliases Abou Haidara or Abderrazak le Para, is one of the leaders of the Islamist militia Salafist Group for Preaching and Combat ....
- Anwar al-AwlakiAnwar al-AwlakiAnwar al-Awlaki was an American and Yemeni imam who was an engineer and educator by training. According to U.S. government officials, he was a senior talent recruiter and motivator who was involved with planning operations for the Islamist militant group al-Qaeda...
- Armed Islamic Group (GIA)
- Army of the Guardians of the Islamic Revolution
- Asbat al-Ansar
- Ayman al-ZawahiriAyman al-ZawahiriAyman Mohammed Rabie al-Zawahiri is an Egyptian physician, Islamic theologian and current leader of al-Qaeda. He was previously the second and last "emir" of the Egyptian Islamic Jihad, having succeeded Abbud al-Zumar in the latter role when Egyptian authorities sentenced al-Zumar to life...
- Communist Party of Nepal (Maoist)
- Dawood IbrahimDawood IbrahimDawood Ibrahim , also known as Dawood Ebrahim, and Sheikh Dawood Hassan, is the head of the organized crime syndicate [[D-Company]] in Mumbai. He is currently on the wanted list of Interpol for organised crime and counterfeiting. He was No. 4 on the Forbes' World's Top 10 most dreaded criminals...
- DulmatinDulmatinDulmatin was a senior figure in the militant group Jemaah Islamiyah and one of the most wanted terrorists in Southeast Asia....
- Doku UmarovDoku UmarovDoku Khamatovich Umarov is a major Chechen Islamist rebel militant in Russia. He is responsible for numerous terror attacks on civilians, earning himself the nickname "Russia's Osama Bin Laden"....
(Added 6-29-10) - Egyptian Islamic Jihad
- Harakat ul-Mujahidin
- Holy Land Foundation
- Ibn Al-Shaykh al-LibiIbn al-Shaykh al-LibiIbn al-Shaykh al-Libi was a Libyan paramilitary trainer for Al-Qaeda. After being captured and interrogated by the American and Egyptian forces, the information he gave under torture by Egyptian authorities was cited by the George W. Bush Administration in the months preceding the 2003 invasion of...
- Ilyas Kashmiri (militant)Ilyas Kashmiri (militant)Ilyas Kashmiri, also referred to as Maulana Ilyas Kashmiri and Muhammad Ilyas Kashmiri , was a senior al-Qaeda member and leader of the Harkat-ul-Jihad al-Islami He was also connected with the Soviet-Afghan war, the Kashmir conflict and attacks against India, Pakistan and the United States...
- International Islamic Relief OrganizationInternational Islamic Relief OrganizationThe International Islamic Relief Organization, , is a charity based in Saudi Arabia. It is a member of The Conference of NGOs, where it serves on the board...
- InterpalInterpalInterpal is the working name for the British charity Palestinian Relief and Development Fund founded in 1994 which states that it is a non-political charity to alleviate problems faced by Palestinians, and focused solely on the provision of relief and development aid to the poor and needy...
http://www.nytimes.com/2007/08/17/nyregion/17lives.html?pagewanted=print - Islamic Army of Aden
- Islamic Movement of UzbekistanIslamic Movement of UzbekistanThe Islamic Movement of Uzbekistan is a militant Islamist group formed in 1991 by the Islamic ideologue Tahir Yuldashev, and former Soviet paratrooper Juma Namangani—both ethnic Uzbeks from the Fergana Valley...
- Islamic Resistance Support OrganizationIslamic Resistance Support OrganizationIslamic Resistance Support Association officially known in or Hay'at Da'am al-Muqawama al-Islamiya fi Lubnan is a Hezbollah charity fund used to fundraise for the group, and to pay for the services it offers in Lebanon....
- Jihad Al BinnaJihad Al BinnaJihād al-Binā' , or "Effort for Reconstruction" in Arabic, is a real estate foundation run by Hezbollah in Lebanon.The primary purpose of the organization is to help alleviate the consequences of the Lebanese Civil War and Israeli occupation...
- Khaled MashalKhaled MashalKhaled Mashal, also known as Khaled Mashaal, Khaled Meshaal, and Khalid Mish'al, has been the main leader of Hamas since the assassination of Abdel Aziz al-Rantissi in 2004. In addition, Mashal heads the Syrian branch of the political bureau of Hamas.Mashal was born in Silwad, a village north of...
- Libyan Islamic Fighting GroupLibyan Islamic Fighting GroupLibyan Islamic Movement formerly known as The Libyan Islamic Fighting Group also known as Al-Jama’a al-Islamiyyah al-Muqatilah bi-Libya is a group active in Libya which played a key role in deposing Colonel Muammar Gaddafi's regime, allying itself with the National Transitional Council.However...
- Mahfouz Ould al-Walid
- Maktab al-Khidamat
- Mamoun DarkazanliMamoun DarkazanliMamoun Darkazanli is a citizen of Germany and Syria who is wanted in Spain on terrorism charges....
- Musa Abu Marzouk
- Mustafa Muhammad Ahmad
- Osbat al-AnsarOsbat al-AnsarOsbat al-Ansar or Asbat an-Ansar is a Lebanon-based Sunni fundamentalist group established in the early 1990s which professes the Salifi form of Islam and the overthrow of the Lebanese-dominated secular government...
- Saderat Bank of Iran
- Salafist Group for Call and Combat
- Sayf al-Adl
- Tamils Rehabilitation OrganisationTamils Rehabilitation OrganisationThe Tamils Rehabilitation Organisation was established in 1985 in Tamil Nadu in southeastern India by Tamil refugees fleeing the violence in North and East Sri Lanka. Its operation to provide relief to the refugees in India continued until 1987...
- Thirwat ShehataThirwat ShehataBorn June 29 1960, Thirwat Salah Shehata was a core member of Egyptian Islamic Jihad.Married to the sister of Mahmoud Jaballah, Shehata served as Jaballah's lawyer in Egypt....
- Union of GoodUnion of GoodThe Union of Good , also known as the Charity Coalition, is an umbrella organization consisting of over 50 Islamic charities and funds which funnel money to organizations belonging to Hamas, which currently rules the territory of the Gaza Strip...
- Wafa Humanitarian Organization
- Yasin al-QadiYasin al-QadiYasin al-Qadi is a citizen of Saudi Arabia who was subjected to economic sanctions because he is suspected of ties to terrorism.The United States Treasury classified Al Qadi as a "Specially Designated Global Terrorist"....
OFAC is responsible for administering the SDN List, and challenges to a designation are can be set forth to them in a Petition for Review, also known as an OFAC Request for Reconsideration. Petitioners have the right to ask for a hearing before OFAC to discuss their designation, but OFAC is not required to provide one.
See also
- Anti-money laundering
- HawalaHawalaHawala is an informal value transfer system based on the performance and honor of a huge network of money brokers, which are primarily located in the Middle East, North Africa, the Horn of Africa, and South Asia...
- U.S. sanctions against Iran
- Propaganda Department of the Communist Party of China
- PaypalPayPalPayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....