CHAPTER 4: CREDIT MANAGEMENT
Many sanctions are based on United Nations and other international mandates. Many are multilateral in scope and involve cooperation with other governments.
Examples of these lists include:
U.S. OFAC (Office of foreign Assets Control): SDN (Specially Designated Nationals list) —includes the foreign Terrorist Organizations (FTOs) Canadian OSFI list (Office of Superintendent of financial Institutions)
UN Consolidated list EU Consolidated list UK list Australian DFAT list (Department of Foreign Affairs and Trade) CH SEKO (Europe) (Switzerland State Secretariat for Economic Affairs) World Bank list of Debarred Parties
The major difference among countries is in how these laws are enforced. While many countries strongly encourage compliance, in the U.S. violations of OFAC regulations can result in both civil and criminal penalties. Criminal penalties may include fines ranging up to $20 million and imprisonment from 10 to 30 years. OFFICE OF FOREIGN ASSETS CONTROL (OFAC) The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions against targeted foreign governments, individuals, and entities such as terrorists and drug traffickers. Sanctions may be comprehensive or selective. OFAC uses trade restrictions and asset-blocking (“freezing”) to accomplish foreign policy and national security goals. Although awareness of OFAC increased significantly after September 11, 2001, OFAC has been in existence for more than 60 years—and predecessor laws go back much farther (for example, Trading With the Enemy Act of 1917). Yet even today, many are unaware of their responsibility and liability regarding OFAC sanctions. The U.S. Departments of Treasury, State, Justice, Homeland Security, Commerce, and Defense all maintain lists of individuals, parties, and countries for which there are restrictions on business transactions. Most of these are consolidated by OFAC in its Specially Designated Nationals (SDN) list.
U.S. businesses, individuals, and others subject to OFAC jurisdiction (collectively referred to as “U.S. persons”) must comply with the full legal requirements of OFAC programs:
U.S. persons may not sell or acquire goods and services from persons or organizations on the OFAC list. In addition, U.S. persons may not ship goods nor make payments or transfer funds to any individual, organization, or country that falls under sanctions. note that the implications for your purchasing and accounts payable departments are significant.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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