The Office of Foreign Assets Control (OFAC) is a part of the U.S. Department of the Treasury. Its main job is to protect the United States by enforcing economic and trade sanctions against foreign countries, organizations, and individuals who pose threats to national security, foreign policy, or the economy. Essentially, OFAC helps keep America safe by controlling who can do business with the U.S. and how.
Why Does OFAC Exist?
The world can be a dangerous place, with various threats like terrorism, drug trafficking, human rights abuses, and cybercrime. The U.S. government uses economic pressure as a tool to deal with these issues. Instead of using military force, the U.S. can impose sanctions, which are financial restrictions, to limit the activities of individuals, companies, or even entire countries. For example, if a foreign government is sponsoring terrorism, OFAC can freeze its assets or restrict its access to the U.S. financial system.
How Does OFAC Work?
OFAC maintains a list known as the Specially Designated Nationals (SDN) list. This list includes names of individuals, organizations, and companies that are banned from doing business with Americans or U.S.-based companies. If someone is on this list, their assets in the U.S. can be frozen, and they are cut off from the American financial system. For example, if a company in Iran is believed to be supporting a nuclear weapons program, OFAC can prevent that company from using U.S. banks.
What Does This Mean for Florida Community Associations?
Occasionally, a home or condominium unit may be owned by a person or company (corporation or LLC) that is on OFAC’s list. If that home or unit goes into arrears on its assessments, and the Association attempts to collect those assessments, or foreclose on the home or unit, without OFAC’s permission, it could face heavy fines. Getting permission from OFAC to collect assessments from these “blocked” assets, in the form of license, is entirely possible, but it can take some time. If you are notified that a home or unit is under federal seizure, or if you have reason to believe that a unit is owned by a foreign entity, check the names against OFAC’s lists. This will help ensure that you aren’t unintentionally breaking the law. Of course, best practice is to check all questionable units and names against OFAC’s lists.
In summary, the Office of Foreign Assets Control helps protect the U.S. by using financial measures to prevent bad actors from accessing resources that could harm national interests. If you have questions, I strongly recommend that you consult with your Association’s legal counsel.
