OFAC SDN List and beyond: Latest changes and how to keep track

OFAC is the short name for the US Treasury Department’s Office of Foreign Assets Control. OFAC is the financial intelligence and enforcement agency that administers and enforces US economic and trade sanctions in accordance with US national security and foreign policy objectives.

As part of its enforcement efforts, OFAC publishes the “SDN List” – the “Specially Designated Nationals And Blocked Persons List.” This sanctions list includes so-called "Specially Designated Nationals" (SDNs):

• Individuals and companies owned or controlled by, or acting for or on behalf of, sanctioned countries.
• Individuals, groups, and entities designated under non-country-specific sanctions programs (such as terrorists and narcotics traffickers)

Assets of SDNs are blocked and US persons are generally prohibited from dealing with them. But not only US businesses are affected by US trade restrictions: Due to the extraterritorial reach of US export controls, screening against US sanctions lists is also recommended for companies that trade in US goods, technology, or services – directly or indirectly – no matter where in the world they are located.

Several different sanctions programs are covered as part of OFAC’s SDN List – to date more than 30. This involves a common misunderstanding: Many companies believe that these included sanctions programs represent individual US sanctions lists. But that is not actually the case: All sanctions programs on the SDN List form part of the scope of the SDN List itself.

There is a lot of dynamism in developments on the SDN List and contents get updated rather frequently. At the time of this article, new sanctions programs that OFAC updated on this list include the Burma-related sanctions of February 22, 2021. And in January 2021 alone, the following sanctions programs were updated on the SDN List: Foreign Interference in a United States Election Sanctions, Global Magnitsky Sanctions, Hong Kong-Related Sanctions, Iran Sanctions, and Non-Proliferation Sanctions.

Keeping track of all these changes efficiently is virtually impossible without IT support. AEB software automatically reflects SDN List updates as part of its up-to-date data service in the Compliance Screening solution. As soon as OFAC includes new sanctions on the SDN List, companies working with this sanctions list in Compliance Screening have got them covered.

The fact that the SDN List is not the only sanctions list published by OFAC complicates matters further. Several additional lists form part of OFAC’s trade controls. To make it easier to comply with its sanctions regulations, OFAC is offering its non-SDN sanctions lists in a consolidated set of data files entitled "the Consolidated Sanctions List" (CSL).

While this is helpful for businesses that need to screen against US sanctions lists, it can also be cause for more confusion: Even though the content of the consolidated sanctions list is not part of SDN List, records in these consolidated files may also appear on the SDN List. One of the reasons for this is that entries can be subject to financial sanctions and other types of sanctions at the same time.

But the challenge to screen against relevant US sanctions lists does not end with OFAC. A number of other US authorities also publish sanctions lists. These include the following US government agencies:

• US Department of Commerce – Bureau of Industry and Security (BIS)
• US Department of the Treasury – Financial Crimes Enforcement Network
• US Department of State – Directorate of Defense Trade Controls (DDTC)
• US Department of State – Bureau of International Security and Nonproliferation
• US Department of State – Bureau of Counterterrorism and Countering Violent Extremism
• US General Services Administration (GSA)

Get an overview of available US sanctions lists from different authorities in AEB’s Compliance Screening

US export controls may be one of the most comprehensive systems in the world, but they are certainly not the only trade control regime that businesses need to comply with. Which lists should you screen against? Which sanctions regimes across the globe are relevant for your internal compliance programs? The following questions help you to navigate the maze:

1. Where is your business incorporated?
2. What goods, technology, and services do you deliver?
3. Where do you deliver to?
4. To whom do you deliver?
5. What is the end use of your traded goods, technology, and services?

Setting up an effective internal compliance program (ICP) can be a challenge. And it can be no less difficult to keep an eye on new customers and suppliers, assess your evolving product portfolio, evaluate required trade compliance measures, and implement continuous improvement for existing ICPs.

AEB’s solution Risk Assessment is designed exactly for this purpose: It supports your onboarding processes, helps you to overcome the lack of transparency and inefficient communication channels in your organization, and delivers documentation and templates for all stages of your ICP.

And if you are working with controlled goods, technology, and services (including dual-use items), please take a look at our software for Export Controls and License Management as well. Trade compliance is a serious matter and automation is not only relieving the burden of involved tasks for your teams but also delivers excellent return on investment.

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