OFAC Due Diligence in Securities Offerings

Summary

This practice note discusses OFAC due diligence in securities offerings. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) oversees and enforces economic sanctions against certain countries, regions, entities, and individuals. It is important to have an understanding of these sanctions and conduct diligence because significant penalties can be imposed for violations of the OFAC sanctions, including on a strict-liability basis. Thus, a person or entity can be fined for violating the sanctions even though it did not know it was committing a violation. In general, the OFAC sanctions are designed to further the federal government’s foreign policy and national security goals, including efforts to combat human rights violations, terrorism, and narcotics trafficking.