What does OFAC stand for? It is the Office of Foreign Assets Control, an office inside the United States Department of the Treasury. OFAC carries out and enforces economic and trade sanctions, the rules that limit business with certain countries, groups and people for foreign policy or national security reasons.
Most Americans meet the letters on a bank screen or a payment form, not in a news story. When a bank says a wire transfer is under "OFAC review," it means the bank is checking the names involved against the government's sanctions lists before it lets the money move.
Quick facts
Stands for
Office of Foreign Assets ControlPart of
US Department of the TreasuryMain job
Running and enforcing US economic and trade sanctionsBest known list
The SDN list (Specially Designated Nationals and Blocked Persons)How to say it
"OH-fak" as a word; some say the lettersStarted
Formally created in 1950; an earlier Treasury office began in 1940Used in
Banking, shipping, export, insurance and payment compliance
What does OFAC stand for, and what do the words mean?
OFAC stands for four words, and each one hints at the office's role.
| Letter | Word | Meaning here |
|---|---|---|
| O | Office | A unit within the Treasury, not a standalone agency |
| F | Foreign | Its targets are outside the United States or tied to foreign threats |
| A | Assets | Money, property and business interests |
| C | Control | The power to block, freeze or allow dealings |
The name reflects its first big task. When the office was formally set up in 1950, its job included blocking assets linked to countries the United States was then opposing. The basic tool, freezing property and banning transactions, is still at the center of its work. More letters from Washington are collected on our government acronyms page.
What OFAC does
- Runs sanctions programs. Each program targets a country, a regime or an activity such as terrorism, drug trafficking or the spread of weapons.
- Publishes lists. The best known is the SDN list, which names people, companies, vessels and groups whose property is blocked.
- Issues licenses. A license allows a deal that would otherwise be banned. General licenses cover broad cases; specific licenses answer one request.
- Enforces the rules. It can impose civil penalties on people and businesses that break the rules, and serious cases can be referred for criminal prosecution.
OFAC rules apply to US persons, a term that covers citizens and permanent residents wherever they are, companies organized in the United States, and anyone physically in the country.
OFAC checks in everyday life
You may never deal with the office directly, but the companies you use do. Banks, payment apps, car dealers, insurers and shipping firms run customer names through screening software that compares them with the lists.
Bank message: "Your international wire is pending an OFAC review." This is usually routine. A name, a country or a bank in the transfer looked similar to something on a list, and staff must confirm it is not a match before releasing the payment.
False alarms are common, because many people share names. The bank may ask for a birth date, an address or the purpose of the payment to clear things up. Domestic transfers such as ACH payments can be screened too, though delays are more common on international wires.
How to say and write OFAC
Most people in banking say "OH-fak," so in their mouths it is a true acronym. Some read it as four letters, "O F A C," especially when they first see it. All four letters stay capitalized, and no periods are needed. Whether you say the word or the letters, it opens with an "oh" sound, so write "an OFAC check."
Sentences you might see:
- "The vendor passed OFAC screening."
- "This program is administered by OFAC."
- "Check the SDN list before you ship."
- "We applied for an OFAC license."
OFAC and the agencies people confuse with it
Several offices deal with money and the law, and their roles are separate.
- IRS: also part of the Treasury, but it collects taxes, not sanctions.
- SEC: an independent agency that oversees securities markets.
- FDIC: insures bank deposits and supervises many banks.
- DOJ: the Justice Department, which handles criminal cases, including some sanctions cases.
A simple way to remember it: if the question is "may this money move to or from this person or country at all," it is an OFAC question.
Questions people ask
What does an OFAC check mean?
It means a company compared your name, and sometimes the other party's name, against the government's sanctions lists. Most checks clear in seconds. A possible match leads to a manual review.
What is the OFAC list?
People usually mean the SDN list, short for Specially Designated Nationals and Blocked Persons. It names individuals, companies, ships and groups whose property US persons must block and with whom they generally may not deal.
Is OFAC a government agency?
Yes. It sits within the Treasury Department, so it is part of the federal government.
Why is my wire transfer held for OFAC review?
Something in the transfer looked like a possible match to a sanctions list, such as a similar name or a listed country. The bank must confirm before it releases the money, and it may ask you a few questions.
How do you pronounce OFAC?
Most people say "OH-fak." Reading the four letters aloud is also understood.