Foreign Assets Control (OFAC), United States Office

The Office of Foreign Assets Control (OFAC) enforces economic and trade sanctions against foreign nations, drug traffickers, and terrorist organizations. The OFAC is part of the Department of the Treasury and acts under the authority of legislative controls and the wartime and national emergency power acts. Under these measures the OFAC has authority to trace and freeze foreign assets of those deemed to be a threat to national security.

The OFAC has its roots in the American Civil War. During this period, the Treasury Department sought and seized money and goods being traded or sold by the Confederacy under the Trading with the Enemy Act. During World War I, Congress updated the Treasury Department's authority under the revised Trading with the Enemy Act of 1917. In 1940 Congress sought to prevent the Nazis from using assets seized from the countries that Germany occupied by creating the Office of Foreign Funds Control (OFFC). After the United States entered World War II, the OFFC froze Axis assets and enforced the prohibition on trading with Axis nations.

President Truman established the current Office of Foreign Assets Control (OFAC) in 1950 as a reaction to Chinese involvement in the Korean War. The OFAC was charged with freezing and blocking all asset transfers by China and North Korea. Although modified several times, American economic sanctions against North Korea have continued under The Foreign Assets Control Regulations since 1950.

Recently, the OFAC has been primarily concerned with tracing and freezing the assets of drug traffickers and terrorist organizations. The OFAC has played a key role in American efforts to cut funding to terrorist organizations since the September 11, 2001, terrorist attacks on the United States. Executive Order 13224 "Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism" granted the OFAC wide powers in administering and enforcing economic sanctions against suspected terrorist. This order also allowed the OFAC, in conjunction with the secretary of state and attorney general, to determine those responsible for funding terrorism and take appropriate action.

█ FURTHER READING:

ELECTRONIC:

United States Department of Foreign Assets Control. <http://www.ofac.gov/>(05 January 2003).

SEE ALSO

Terrorist Organizations, Freezing of Assets