The Office of Foreign Assets Control (“OFAC”) is a division of the U.S. Department of the Treasury. As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. persons are generally prohibited from dealing with them.
In addition to the duties Escrow Holders are obligated to perform in connection with the instructions deposited by buyers and sellers, we are also tasked with certain mandatory practices under Local, State and Federal laws. One such duty is a cross-check of all transaction parties against OFAC’s SDN list. Escrow Holders must compare the information furnished by buyers and sellers – full names, residence addresses, and so forth – against the SDN list to confirm that it is not transacting with any person prohibited to do business in the United States.
The probability that an SDN might attempt to purchase or sell U.S. real property through the customary escrow process is extraordinarily low. In fact, in the tens of thousands of escrow transactions which have been managed by the members of Case Escrow teams since the imposition of this requirement, no such SDN has ever been identified! For more information about OFAC and the Specially Designated Nationals list, visit: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx