OFAC stands for Office of Foreign Asset Control. OFAC is a division of the United States Treasury. It’s job is to impose and enforce economic sanctions against individuals who are hostile to the United States. The OFAC requires dealerships to remain compliant. If a dealership does business with a prohibited individual they will be fined or imprisoned depending upon the circumstances. Keep reading to find out what a dealership must do to ensure OFAC compliance.

The “SDN List”

The OFAC keeps a list of designated nationals and blocked persons known as the “SDN list”. This is a list of individuals including terrorist and drug traffickers which the government prohibits US businesses from engaging in business with. A dealership can either check each customer against the list or use a third-party service. Most dealerships use a third-party service or rely on their credit bureau to check to save time and resources.

What Do You DO If You Get a "Match"?

If a possible customer matches with a name on the SDN list it is a preliminary match. The dealership must make sure that the individual attempting the transaction is the same as the individual on the list. The dealership should gather information from the individual until they are certain they have a “match” or a “false positive.” If there are many similarities and they have a "match," the dealership must contact the OFAC hotline at 1-800-540-6322 to report.

OFAC Penalties

If a dealership fails to identify an individual on the SDN list and does business with them, they are subject to severe penalties up to $10 million. The OFAC may also choose to bring civil penalty charges up to $1 million. Any dealership that is not running OFAC checks needs to begin. Self reporting transactions that have made with individuals on the OFAC list can reduce penalties by up to 50 percent.

Dealerships can't afford to make mistakes when it comes to OFAC compliance. Contact us today to ensure that your dealership is and remains OFAC complaint.