What is OFAC sanctions screening?
OFAC sanctions screening is the check that a customer, counterparty or payment does not involve a person, company or place subject to sanctions administered by the US Treasury's Office of Foreign Assets Control (OFAC). It compares names and other identifiers against OFAC's lists, including the SDN List, before money moves. Example (round numbers): a supplier due 50,000 dollars is not on the SDN List, but a listed person owns 50% of it. Under OFAC's 50 Percent Rule the supplier is blocked, so a US bank must freeze the payment and report it.
- All US persons must comply with OFAC sanctions, including US companies and their foreign branches.
- Property of a blocked person in the US or held by a US person must be blocked, meaning frozen, and reported to OFAC within 10 business days.
- Under the 50 Percent Rule, a company owned 50 percent or more, directly or indirectly and in aggregate, by blocked persons is itself blocked, listed or not.
- OFAC may list digital currency addresses on the SDN List, and the obligations are the same for digital currency as for ordinary money.
- Screening ownership, not just names, is what catches unlisted blocked companies.
How OFAC screening works
OFAC publishes the List of Specially Designated Nationals and Blocked Persons (SDN List). US persons are generally prohibited from dealing with listed persons, and any of their property within the United States or held by a US person must be blocked: frozen, not seized, and not transferred. Blocked property must be reported to OFAC within 10 business days.
Some sanctions block people who are not on any list, including entities caught by the 50 Percent Rule. OFAC's FAQ 401 gives worked examples:
| Ownership | Blocked? |
|---|---|
| Blocked person X owns 50% of A; A owns 50% of B | A and B are both blocked |
| X owns 50% of A and 50% of B; A and B each own 25% of C | C is blocked: X's indirect stakes total 50% |
| X owns 50% of A and 10% of B; A owns 40% of B | B is blocked: 10% direct plus 40% through A |
| X owns 25% of A and 25% of B; A and B each own 50% of C | C is not blocked: neither A nor B is blocked |
Source: OFAC, FAQ 401. As published on 29 October 2026.
Where a business meets it
- Opening an account, when the provider screens the company, its owners and directors as part of KYB.
- Every payment, when names, banks and countries on a transfer are screened before it is released.
- Stablecoins. OFAC states that compliance obligations are the same whether a transaction is in digital currency or ordinary currency, and it may add wallet addresses to the SDN List.
- New suppliers, where checking ownership protects the buyer from a blocked payment.
Common mistakes
- Screening names only. A clean name can still be blocked through ownership; ask for the ownership chart.
- Ignoring spelling variants. Transliterated names appear in several forms; screen the variants.
- Assuming the bank's check covers you. US persons must comply themselves; a bank screening a payment does not vet the contract behind it.
- Treating a listing as permanent or final. Lists change often; screen at onboarding and again before payment.
Related terms and how Helm handles it
Ownership checks connect to the ultimate beneficial owner. Helm does not serve businesses in countries under comprehensive US sanctions; see eligibility.
Open a Helm account
USD, EUR and GBP accounts in your company's name, with a named account manager.
Open accountQuestions
What is the OFAC SDN List?
It is OFAC's List of Specially Designated Nationals and Blocked Persons. US persons are generally prohibited from dealing with those on it, and their property held by US persons must be blocked.
What is OFAC's 50 Percent Rule?
Any entity owned 50 percent or more, directly or indirectly and in aggregate, by one or more blocked persons is itself blocked, even if it is not named on the SDN List. OFAC's FAQ 401 counts stakes held through other entities that are themselves 50 percent or more owned by blocked persons.
Who has to comply with OFAC sanctions?
All US persons: US citizens and permanent residents wherever located, everyone within the United States, and US-incorporated entities and their foreign branches. Terms such as US person are defined in each program's regulations in 31 CFR chapter V.
What happens if a payment matches the SDN List?
A US person holding the funds must block them and report the blocked property to OFAC within 10 business days. The funds stay frozen until OFAC authorizes their release.
References
- OFAC: Basic information on OFAC and sanctions (FAQs)
- OFAC: FAQ 401, the 50 Percent Rule and indirect ownership
- OFAC: Questions on virtual currency
This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.