An OFAC check is a screening that compares a person or business against the sanctions lists maintained by the U.S. Treasury’s Office of Foreign Assets Control before you enter into a transaction with them. If the party is on a list, you either freeze their property or refuse the transaction, and you file a report with OFAC. Every U.S. citizen, permanent resident, U.S.-organized entity, and person physically present in the United States is required to do this, and the requirement is not limited to banks.1Office of Foreign Assets Control. 11. Who Must Comply With OFAC Sanctions? Insurance firms, real estate companies, importers and exporters, money services businesses, dealers in precious metals, and nonprofits all fall inside the perimeter. The mechanics of running the check are straightforward once you know which lists to search, what data to feed in, and how to handle a hit.
Which Lists You Screen Against
The primary list is the Specially Designated Nationals and Blocked Persons List, known as the SDN List. It names individuals and entities whose property must be frozen on contact and with whom all transactions are prohibited. Alongside it, OFAC publishes a Non-SDN Consolidated Sanctions List that pulls together several narrower programs, including sectoral sanctions and restrictions on foreign financial institutions, where the prohibitions stop short of full asset blocking but still bar specific dealings.2Office of Foreign Assets Control. Additional Sanctions Lists
You do not need to search each list separately. OFAC’s online Sanctions List Search tool queries both the SDN List and the Non-SDN Consolidated Sanctions List in a single run.3Office of Foreign Assets Control. Sanctions List Search Tool
Information to Gather Before You Search
The check is only as accurate as the data going into it. At a minimum, collect the full legal name of the person or entity. Add any known aliases or alternate spellings, because SDN entries routinely list “also known as” designations. For individuals, get the date of birth, place of birth, and address. For entities, get the country of incorporation.
SDN entries also carry nationality, passport numbers, and tax identification numbers. Having those on your side of the table is what lets you clear a common-name false positive quickly. If you screen with only a name, you cannot tell whether a hit is the sanctioned person or someone who happens to share the name.
Running the Check
OFAC provides a free Sanctions List Search at sanctionssearch.ofac.treas.gov.4U.S. Department of the Treasury. Sanctions List Search Enter the name and any identifying details you have, and the tool compares them against every active sanctions list. The tool is suitable for one-off or low-volume screening. OFAC notes that using it does not shield you from liability and is not a substitute for a full due-diligence program.
The name field uses fuzzy logic, so the tool catches misspellings, phonetic equivalents, and partial matches. A slider sets your confidence threshold: at 100, only exact matches appear; drop it to 50 or 60 and the tool returns a wider set, which helps when a name might be transliterated differently or deliberately altered.5Office of Foreign Assets Control. Frequently Asked Questions – How to Search OFAC’s Sanctions Lists Each result carries a percentage score. Clicking into an entry shows the reason for the listing and every associated identifier.
Now compare identifiers. If the birth date, country, or passport number does not line up, you clear the potential match in your internal records and move on. If they do line up, you have a confirmed match and must act on it immediately.
How Often to Re-Screen
OFAC updates its lists frequently, sometimes several times a week. A one-time check at onboarding is not enough. OFAC does not prescribe a specific frequency; the expectation is a risk-based approach, with higher-risk relationships screened more often.6FFIEC BSA/AML InfoBase. Office of Foreign Assets Control High-volume businesses typically automate this, pulling updated lists and running batch comparisons against their customer databases daily.
What to Do When You Get a Hit
A confirmed match produces one of two responses, depending on whether you are holding property for the sanctioned party.
Block the Property
If you hold funds or other property belonging to or intended for a sanctioned party, you must freeze it in place. No transfers, no withdrawals, no dealings of any kind.7Office of Foreign Assets Control. OFAC FAQ 9 – What Does OFAC Mean When It Refers to “Blocked” Property? Blocked funds go into an interest-bearing account on your books, and only OFAC-authorized debits may be taken from it. Title to the property stays with the sanctioned party; practical control does not.8Office of Foreign Assets Control. Blocking and Rejecting Transactions
Reject the Transaction
If a sanctioned party tries to initiate a transaction with you but you do not hold any of their property, you reject the transaction outright and stop engaging.
Reporting After a Hit
Both actions carry written reporting obligations, filed through the OFAC Reporting System.9Office of Foreign Assets Control. OFAC Reporting System
When you block property, file an initial report within 10 business days of the blocking date. The report identifies your organization, describes the property and the triggering transaction, names the sanctions target, and states the value in U.S. dollars.10eCFR. 31 CFR 501.603 – Reports of Blocked, Unblocked, or Transferred Blocked Property
When you reject a transaction, file a separate report describing the transaction, the parties, the sanctions target that caused the rejection, and the estimated dollar value. Rejected trade documents are reported at zero value, with the shipment value described in a narrative section.11eCFR. 31 CFR 501.604 – Reports of Rejected Transactions
If you still hold blocked property as of June 30 of any year, you must file an Annual Report of Blocked Property by September 30 using form TD-F 90-22.50 through the ORS. The report is a full inventory of blocked property held on that June 30 snapshot date. Hold no blocked property on that date, and no annual filing is required.12Office of Foreign Assets Control. Reminder to File the Annual Report of Blocked Property
Recordkeeping
Every person who engages in a transaction subject to OFAC regulations must keep a full and accurate record of it, available for examination for at least 10 years after the transaction date. For blocked property, records must be maintained the entire time the property remains blocked and for at least 10 years after it is unblocked.13eCFR. 31 CFR 501.601 – Records and Recordkeeping Requirements
The 10-year retention period is recent. OFAC issued a final rule in March 2025 extending the requirement from five years to 10, matching the expanded statute of limitations for civil and criminal sanctions violations under IEEPA and the Trading with the Enemy Act.14U.S. Department of the Treasury. Federal Register – OFAC Recordkeeping Final Rule In practice, retain not just records of blocked or rejected transactions, but documentation of your screening process itself: search results, due-diligence notes, and the decisions you made to clear potential matches. If OFAC asks about a transaction years later, that paper trail is your defense.
Penalties for Skipping or Mishandling a Check
Civil penalties under the International Emergency Economic Powers Act can reach the greater of $250,000 or twice the value of the underlying transaction per violation.15Office of the Law Revision Counsel. 50 USC 1705 – Penalties OFAC adjusts the amount annually for inflation. As of January 2025, the inflation-adjusted maximum civil penalty under IEEPA is $377,700 per violation; under the Trading with the Enemy Act it is $111,308.16Federal Register. Inflation Adjustment of Civil Monetary Penalties On a large transaction, the “twice the value” formula alone can push a single penalty into seven figures.
Criminal penalties apply when a violation is willful: a fine of up to $1,000,000, imprisonment for up to 20 years, or both.15Office of the Law Revision Counsel. 50 USC 1705 – Penalties Inadvertent compliance failures typically draw civil enforcement rather than criminal prosecution, but civil enforcement is not painless. OFAC has imposed seven-figure civil penalties on companies with inadequate screening programs even where no willful intent was proven.
When a Sanctioned Party Is Not Automatically Off-Limits
Not every transaction involving a sanctioned party is permanently prohibited. OFAC issues licenses that authorize otherwise-prohibited dealings, and there are two kinds.17U.S. Department of the Treasury. OFAC Licenses General licenses authorize a category of transactions for a class of persons without requiring an application; they are published in the regulations, and if your transaction fits every term, you can proceed. Specific licenses are issued case by case in response to a written application submitted through the OFAC Licensing Portal.
Under either type, strict compliance with every condition is required. A license authorizing humanitarian shipments to a sanctioned country does not authorize shipping anything outside the scope described. Straying outside the license terms is treated the same as having no license at all.