What factor determines whether a transaction falls under OFAC scrutiny?

The determination of whether a transaction falls under OFAC (Office of Foreign Assets Control) scrutiny is influenced by the involvement of all parties in the transaction. OFAC regulations are designed to enforce sanctions that target specific countries, individuals, and entities. As such, identifying whether any party to a transaction is listed on an OFAC sanctions list—regardless of their location, the transaction size, or the nature of the goods being exchanged—can trigger scrutiny.

This comprehensive approach is essential because even if a transaction seems innocuous based on other factors, the presence of a sanctioned party in the transaction can render it illegal under U.S. law. Therefore, understanding the involvement of all parties, including those in direct or indirect roles, becomes critical in assessing compliance with OFAC regulations.