OFAC (Office of Foreign Assets Control) is the agency within the U.S. Treasury Department that manages economic and trade sanctions programs. For an individual or company operating in Türkiye, an OFAC review may be relevant during international payments, banking, supply chain transactions, and dealings with foreign partners. The role of an OFAC lawyer is to assess the specific transaction in terms of the relevant sanctions program and the parties involved, explain the applicable rules, and plan the necessary legal steps.
Why might a transaction in Türkiye require OFAC review?
The impact of US sanctions is not determined solely by whether or not the parties are located in Türkiye. The transaction is examined to determine if there is a risk of secondary sanctions specific to a US person, the US financial system, a party on the sanctions list, or specific programs. Each sanctions program has a different scope; OFAC clarifies that it does not maintain a single list of prohibited countries applicable to all. Therefore, “being established in Türkiye” alone does not determine compliance.
What questions are asked in a legal review?
- Who are the parties to the transaction and who are the actual beneficiaries?
- Is either party on OFAC’s SDN or other sanctions lists?
- Does a company not on the list have 50% or more of its ownership directly or indirectly held by the blocked individuals?
- What rules apply to the payment channel, goods or services, destination, and relevant enforcement scheme?
- Could there be a general or specific license, exception, or notification obligation involved?
Under OFAC’s “50% rule,” if one or more blocked individuals directly or indirectly hold a total ownership of 50% or more, this can result in blocked status even if the company does not appear separately on the list. Therefore, the list search is not simply a name match.
How does legal support proceed?
First, transaction documents, partnership structure, and payment flow are examined. Then, the relevant sanctions program and current list records are checked. If a possible match or restriction is found, a legal opinion is sought on a transaction-by-transaction basis, and, where appropriate, an OFAC license application or delisting application is evaluated. Similar names in the list results should not be confused with an actual sanctions record.
What types of work does an OFAC lawyer handle?
Companies in Türkiye seeking OFAC lawyers often ask, “Can we proceed with this transaction?” The answer cannot be given solely by looking at the recipient country or the payment currency. The parties to the contract, the origin and intended use of the goods, the recipient of the service, intermediaries, the banking chain, and the ownership structure of the companies must all be examined together. Legal advice will match this information with the current US sanctions program and indicate which document will resolve any ambiguities.
In a commercial case, contract law and sanctions review are separate areas. The validity of a contract under Turkish law does not automatically mean that every payment method is compliant with US sanctions. Conversely, a bank’s refusal of a transaction alone does not prove that the party is on the OFAC list. The bank may apply stricter controls due to its own risk policy. To make this distinction, the payment message, the bank’s statement, and the relevant listing record must be read together.
Examples of OFAC risk observed in Türkiye
For a Turkish exporter, trading with a sanctioned country, the provision of US-linked software or services, the appearance of a foreign partner on the SDN list, and a payment withheld by an international bank all raise different questions. The same answer doesn’t apply to every case. Particularly in cases involving receivables related to Iran or Russia, the legal nature of the collection process and the payment channel are examined separately. The articles on the collection of trade receivables from Iran in Turkey and the enforcement and litigation process in Turkey for receivables from Russia explain the scope of the receivables; the OFAC analysis additionally addresses sanctions and payment restrictions.
Documents required for the initial assessment
| Document or information | Why is it examined? |
|---|---|
| Contract, order and invoice | The scope of the goods or services, the parties involved, and the transaction date are specified. |
| Commercial registry and partnership scheme | Direct and indirect ownership, as well as the 50% rule, are examined. |
| Payment instructions and bank correspondence | The connection to the US financial system and the reasoning behind the rejection are understandable. |
| Shipping and delivery documents | Origin, route, destination, and intermediary parties are shown. |
| List scan results | True matches are distinguished from name similarities. |
How to interpret a list scan?
A result from OFAC’s search tool is a starting point. Identifying data such as name, date of birth, address, passport or company registration information should be compared. The SDN List and other OFAC lists do not have the same legal effect. While SDN registration carries serious consequences in terms of asset blocking and transaction restrictions for U.S. citizens, other lists may have program-specific restrictions. It should be noted which list and program the search result belongs to.
The second stage is the chain of ownership. OFAC’s 50% rule also considers the total share of multiple blocked individuals. In indirect ownership, the share percentages of the intermediary companies must be calculated. Mere management or control does not automatically imply 50% ownership under this rule; however, it does not eliminate other sanction risks. Therefore, the investigation is conducted through both the registered and actual transaction parties.
Legal opinions and application options.
The outcome of the consultation should not be a single-word assessment such as “risky.” The specific sanctions program and provision in question, known facts, missing documentation, potential licenses or exemptions, the basis for the disclosure to be provided to the bank, and subsequent steps must be presented in writing. If a general license exists, its scope and conditions are reviewed. If a specific license is required, transaction and party information for the OFAC application is prepared. If an actual listing is involved, the OFAC delisting process is also evaluated separately.
A claim for receivables or contractual obligations may also arise in a commercial dispute related to sanctions. In this respect, the collection of foreign receivables in Turkey and company law issues complement the OFAC analysis. Nevertheless, the risk of sanctions should be considered independently of the existence of a claim under Turkish law.
A preventive approach for companies.
OFAC emphasizes management support, risk assessment, internal controls, testing and auditing, and training in an effective compliance program. The same checklist is not sufficient for every business. An exporting company may need to focus more on its customer and transportation chain, a payment institution on transaction parties, and an investor on the ownership structure. Re-screening after checklist updates and preserving the basis for the decision provides clarity in future disputes.
Before meeting with the OFAC lawyer
Providing a brief timeline of the process, gathering relevant contracts and correspondence, and sharing any rejection or hold notifications from the bank will expedite the review. Not only the counterparty’s business name but also their registration number and known partners are important. If documents are incomplete, the lawyer will first determine which data needs verification. The outcome may be conditional depending on the level of documentation; the opinion may need to be reconsidered if new information emerges.
When should the evaluation be renewed?
The previous opinion may no longer automatically suffice when the ownership structure of one party changes, a new intermediary or bank enters into force, the place of delivery changes, or OFAC publishes a new listing. It should also be noted that the rules in effect at the time of the transaction may differ from the rules today. In ongoing contracts, it is beneficial for screening to be a control conducted at intervals proportionate to the risk, rather than a one-time formality.
Keeping a record of the dates of the sources used in the investigation and the information provided by the other party in the file facilitates verification.
These records make it easier to reconstruct the assessment at the time of the transaction.
This text is for general informational purposes only. Enforcement rules are subject to change; a separate assessment is required for a specific transaction based on current legislation and documentation.
If a file contains companies established in different countries, the name and ownership information must be verified separately for each legal entity. This allows for a clearer understanding of where the risk arose in the transaction chain.
Frequently Asked Questions
When would a company in Türkiye need an OFAC lawyer?
Legal review is required when an international payment is pending, when a list match is detected on the counterparty’s side, or when a transaction is planned with a sanctioned territory. The transaction’s US connection and related schedule are also determined.
Does having similar names on the OFAC list imply a trading ban?
No. The match must be verified with distinctive identification and company data. However, the transaction risk needs to be assessed until the outcome is clarified.
Is the transaction safe if the company is not listed?
Not necessarily. Total direct or indirect ownership of 50% or more by blocked individuals is also examined. There may be other program-specific restrictions as well.
What is the difference between a general license and a specific license?
A general license is a pre-authorized license granted for a specific category of transaction that meets its requirements. A specific license is assessed upon application for a particular person or transaction. In both cases, the scope and conditions should be carefully read.
What’s the first step if the bank refuses to make the payment?
The bank’s written justification and transaction documents should be obtained, and the actual list match should be separated from the bank’s internal risk policy. The next step is planned according to this result.
