Emily Clarke

What are OFAC Checks?

OFAC stands for The Office of Foreign Assets Control. OFAC is a division of the United States Department of Treasury. This organization is responsible for many things, but one of the most important is an OFAC check. Checks are a mandatory process determining whether a foreign entity can do business in the United States.

Many transactions are subject to OFAC checks, but they're most common in the insurance and financial industries. If you're using a payout platform to pay foreign employees or business entities, you must work with a service provider that complies with OFAC regulations.

What's the Purpose of an OFAC Check?

OFAC is one piece of a larger puzzle that involves foreign policy, national security and international trade. These checks aim to protect the United States from terrorism, organized crime and more.

Globalization makes it easier than ever to work with individuals and businesses outside the United States. Many companies hire foreign workers and independent contractors, using a payout platform to facilitate quick and easy payments. While we have the technology to pay for goods and services from all corners of the globe, globalization also paves the way to terrorist funding, money laundering and other crimes.

OFAC checks protect United States citizens and the country's best interest.

What Do OFAC Checks Look For?

OFAC checks provide critical pieces of information with every transaction. But there are a few things that OFAC looks for. The main targets include known terrorist groups, diamond traders, creators of weapons of mass destruction and anyone who poses a threat to the economy, national security or foreign policy.

These checks also obtain more information about transactions to recipients in countries with trade and asset restrictions. That includes countries like Iran, Sudan, Venezuela and Hong Kong, among many others.

Finally, OFAC checks look for specific businesses in many fields that may pose threats to the United States. These companies do business involving financial services, export or import services, legal services, etc. OFAC publishes a list of individuals and companies known for acting on behalf of targeted countries, raising serious red flags.

Author Resource:-

Emily Clarke writes about multiple payment platforms, payouts API, marketplace payouts and more. You can find her thoughts at easy payouts API blog.