If you own a business, especially one that deals in trading, you should stay aware of financial rules and regulations imposed by the government. Keeping track of your assets and being careful about who you’re dealing with should be your priority. The U.S. government has a list of strict rules, and if you break them, you and your business will be put on one of the OFAC lists. But what is OFAC, and what does being on a list mean for your business?
What Is OFAC?
OFAC, or Office of Foreign Assets Control, is an intelligence agency that deals with financial affairs. This financial intelligence agency enforces sanctions on any individual, business, or even a country, that is deemed to have made actions that threaten U.S. national security. It could be anything from terrorist activity, money laundering, drug trafficking, trading with foreign states which are deemed dangerous by the American government, and more. Depending on the type of offense, it imposes different sanctions on the perpetrator.
Check If You’re on One of the Lists
Checking the lists one by one can be almost impossible, and because of that, experts recommend obtaining software that will do that for you. As can be seen on https://www.microbilt.com/product/watchlist-search, some applications can access the database and check all of the economic and financial sanctions imposed. This will help you learn about rules and regulations that you and your business need to comply with. If you fail to do that, you will not just be putting yourself at risk of paying huge fines but also of doing jail time.
Types Of Lists
As we previously mentioned, there is a large number of lists, and you could be placed on them for many different offenses. For example, if you have done trading with a foreign state that the U.S. has imposed sanctions on, you could be placed on a watchlist and later on sanctioned yourself. The sanctions could be selective or full, depending on the gravity of the offense. At the moment, the US government has banned any trading with companies from North Korea, Iran, Syria, Venezuela, and more.
What Are the Sanctions?
When you are on one of the OFAC lists, the first thing that will happen is that all of your assets will be frozen, and you will be forbidden from offering any kind of financial services. These sanctions apply both on and off American soil. You need to get a special license from OFAC in order not to be sanctioned. The legal process can be lengthy and complex, and it has brought many companies and individuals to financial ruin.
It Doesn’t Just Concern the U.S. Citizens
All of the U.S. companies need to comply with the OFAC regulations, but the harsh rules are not limited to only them. Any companies, both domestic and foreign, that possess American assets have the same restrictions and obligations. Depending on the gravity of the offense, people can be forbidden from flying in or out of the country. These limitations can even be applied to transactions that aren’t connected to the U.S. The rules and punishments are getting more and more strict, so you need to be careful and stay informed at all times.
Be Extremely Careful
Keep all the records and watch carefully who your clients are. Many experts recommend making a questionnaire before doing any business. There have been examples where businesses were sanctioned even if it was their client who has done something that doesn’t comply with OFAC rules, and not them. It has become more complicated than ever to follow all the regulations. That is why you should consider hiring someone who will help you keep track of them.
Do Regular Evaluations
Make sure that you are well informed and have the whole picture of your dealings at all times. Employ people who will help you do that, and try to find software that will help you keep track of all the rules and their potential changes. Try to plan out and then examine and analyze every transaction made.
Getting Off the List
Getting off the list is certainly more complex than getting on it. Even if you were put on the list by mistake, proving your innocence will be a lengthy and complicated process. You need to collect all the necessary documentation and then send your removal request to the OFAC. The removal process could be lengthy but stay patient and try to gather as much evidence as possible.
It is always better to be safe than sorry, so take time to get familiar with all OFAC regulations and avoid breaking them as much as possible. Punishments are harsh and can have a dire impact on your business, and even your life. Keep up with all the novelties and watch every transaction you make carefully.