OFAC Regulation Compliance Guide Part 1

The core OFAC rules an agent payment system must follow, from strict liability to the 50 Percent Rule.

TL;DR

TL;DR: OFAC rules are strict liability: intent is not required, and penalties start at $356,000 per violation. Screen every counterparty, remember the 50 Percent Rule, and BLOCK flagged parties.

Strict liability

OFAC, the Office of Foreign Assets Control in the US Treasury, enforces sanctions on a strict liability basis. A payment to a Specially Designated National is a violation even if the sender did not know. Civil penalties start at $356,000 per violation.

The 50 Percent Rule

Blocking extends beyond the names on the SDN List. Under the 50 Percent Rule, an entity owned 50 percent or more by one or more blocked persons is itself blocked. Screening must therefore consider ownership, not just the direct name on the list.

How to comply

• Screen each counterparty against the SDN List before payment.
• Check crypto wallets against 947 OFAC-listed addresses.
• Keep a STAMP record of each decision for audit.