Treasury's
Office of Foreign Assets Control
Every ITT Industries
unit should ensure that
its export control compliance program includes the U.S. Treasury Department's
Office of Foreign Assets Control, known as OFAC.
Most exports that require a license are controlled by either the Commence
Department (for commercial items that have possible military applications)
or by the State Department (for defense articles, services, and related
technologies). OFAC is responsible for economic and trade sanctions against
targeted foreign countries and their agents, terrorists, and narcotics
traffickers.
The Treasury Department has a long history of dealing with sanctions.
Even before World War I Treasury was the major U.S. instrument of economic
warfare. Today OFAC regulations prohibit transactions by "U.S. persons"
in accordance with a complex sent of rules based on different foreign
policy and national security goals.
OFAC sanctions and embargoes target governments such as Cuba, Iran, Iraq,
Libya, North Korea, Sudan, and others. While each sanctions program is
separate, companies should focus on an overriding objective: to provide
enough information to key staff members to enable them to recognize and
stop transactions that may be contrary to the regulations.
There are four lists of entities that prohibit exporters from doing business.
Most companies are familiar with the Commerce Department's Denied Parties
List (of companies under a denial order issued by Commerce) and Entities
List (of foreign end-users engaged in proliferation activities). There
is also the State Department's Debarred Parties List of individuals and
companies that have been denied export privileges.
Less well known is OFAC's list of Specially Designated Nationals (SDNs).
These entities, located throughout the world, can be front companies or
individuals acting on behalf of a targeted country or group. They can
also be identified as terrorists or narcotics traffickers. U.S. persons
are prohibited from dealing with SDNs and must block any property under
their control in which an SDN has an interest.
The foreign policy objectives of the SDN list are different from those
of the Commerce and State lists. The Commerce and State lists do not involve
a full trade embargo, but concern only issues of export privileges and
export licensing.
ITT companies should make sure that persons engaged in export or other
international activities are familiar with the OFAC regulations. Those
regulations apply to all U.S. citizens and permanent resident aliens wherever
they are located, and to all persons within the United States. The rules
apply to foreign branches of U.S. corporations, but except for Cuba and
North Korea, they do not apply to foreign subsidiaries of U.S. corporations.
Readers will recall that last January's edition of "In Our Hands:
Extra" described how units can now check current or potential customers
against the SDN list through the OCR Services website now available to
all ITT Industries companies. Every unit involved in international trade
is encouraged to obtain a user name and password, and to become familiar
with the OCR website.
OFAC has information on its website at http://www.treas.gov/ofac,
or the office can be called at 1-800-540-6322. In case of doubt, consult
your unit's Empowered Official, your Export Administrator, or your company's
legal department for guidance.
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