# Office of Foreign Assets Control The **Office of Foreign Assets Control** is the [[Department of the Treasury]] component that administers and enforces U.S. economic and trade sanctions. It maintains the **Specially Designated Nationals and Blocked Persons (SDN) list**, issues the general and specific licenses that carve exceptions out of sanctions programs, and assesses civil penalties for violations. It sits inside Treasury's Office of Terrorism and Financial Intelligence (since 2004). Its director is **Bradley T. Smith**, who signs its Federal Register designation notices. The post does not require Senate confirmation. ## Origins Treasury ran sanctions as early as the period before the War of 1812. OFAC's direct predecessor, the Office of Foreign Funds Control, was created in April 1940 after Germany invaded Norway, to keep occupied countries' assets out of Nazi hands. The modern office dates to December 1950, when Truman declared a national emergency after China entered the Korean War and blocked all Chinese and North Korean assets under U.S. jurisdiction. It took the OFAC name in 1962. That origin set the pattern: an emergency declaration comes first, and the blocking power follows from it. ## How the power works Most of what OFAC does rests on the [[International Emergency Economic Powers Act]], which becomes available only after a national emergency is declared under the [[National Emergencies Act]]. Each sanctions program therefore traces back to a specific declared emergency, and each such emergency must be renewed annually to keep the program alive. Two features give the office unusual reach. Its **50 percent rule** treats any entity owned half or more by designated persons as itself blocked, without a separate listing. And the dollar-clearing system means designations propagate through correspondent banking to parties who were never designated and have no route to contest anything. → [[Sanctions Designation Pipeline]]: the ASCII process flow of everything this office does, from nomination and the evidentiary memo through listing, the 50 percent rule, licenses and the § 501.807 delisting petition (Reconsideration Portal since July 2026) to the judicial-review posture. ## The 2025–26 turn: sanctions against courts and judges The second Trump administration pointed the office's tools at targets the sanctions system was not built for. - **The ICC.** [[Executive Order 14203]] (February 6, 2025) declared a national emergency with respect to the [[International Criminal Court]], and its officials were then added to the SDN list. - **A foreign supreme court justice.** On July 30, 2025, OFAC designated Brazilian justice [[Alexandre de Moraes]] under [[Global Magnitsky Act]] authority (E.O. 13818), accusing him of "an oppressive campaign of censorship." The designation came while he was presiding over the coup case against Bolsonaro. On December 12, 2025, OFAC removed Moraes, his wife and a family holding company from the list. That was a rare full reversal, and it came through the political channel, not the petition process. It followed a warming of relations between Trump and Lula and the rollback of Trump's Brazil tariffs, and an administration official cited the Brazilian lower house's passage of an amnesty bill as a sign that "lawfare conditions" were improving. - **Terrorism designations as the predicate for force.** Cartel designations fused OFAC listings with the State Department's [[Foreign Terrorist Organization]] track, and the list became part of the legal groundwork for military action. See the pipeline page's Venezuela branch. The Moraes case is the one to remember. Listing and delisting both ran on a presidential timetable. The evidentiary memo and the petition process mattered less than the diplomatic climate. ## See also - [[Sanctions Designation Pipeline]] - [[Specially Designated Nationals List]] · [[Secondary Sanctions]] - [[International Emergency Economic Powers Act]] · [[Emergency Powers Crosswalk]] - [[Executive Order 14203]] · [[Global Magnitsky Act]] · [[Russia and Iran Oil Sanctions Waivers 2026]]