The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) continues to actively enforce sanctions regulations, as reflected in several recent enforcement actions. Accounts Payable teams must take note: failure to screen vendors for sanctions risk can lead to severe financial penalties and reputational damage, even if violations are inadvertent.
In recent months, OFAC has announced multiple settlements with companies found to have engaged in prohibited transactions involving sanctioned parties. For example:
- Interactive Brokers LLC entered into a settlement with OFAC in July 2025 for apparent violations involving blocked persons.
- Unicat Catalyst Technologies, LLC paid a civil penalty in June 2025 related to dealings with an entity on the Specially Designated Nationals (SDN) List.
- Key Holding, LLC was penalized in July 2025 for transactions that violated sanctions programs.
These enforcement actions highlight a critical message for organizations: vendor payments can trigger sanctions violations if proper due diligence is not performed.
Why Vendor Screening Matters for Accounts Payable
OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals. These include sanctions targeting individuals, companies and governments around the world. OFAC’s SDN List and Consolidated Sanctions List are essential tools to ensure compliance.
For Accounts Payable professionals, this means that every vendor—whether domestic or international—must be screened before any payment is processed. This includes new vendors, recurring suppliers and even long-standing business partners. The responsibility to catch red flags does not rest solely with the compliance department. Because AP is where payment execution happens, the team plays a crucial front-line role in sanctions compliance.
Best Practices for AP Sanctions Compliance
To ensure your department is meeting its obligations under U.S. sanctions laws:
- Screen every vendor using the OFAC Sanctions List Search Tool or your company’s designated compliance system before onboarding or processing payments.
- Re-screen vendors regularly, particularly when new sanctions are announced or if vendors operate in high-risk jurisdictions. New sanctions are announced irregularly but sometimes frequently. A screening protocol must account for that.
- Document all screening efforts and retain records of clearance for audit purposes.
- Report any potential matches immediately to your compliance or legal team—do not process payments until cleared.
- Provide periodic training to AP staff to ensure they understand the sanctions screening process and the risks of non-compliance.
Real Risk, Real Consequences
OFAC enforcement is not theoretical. In 2023, OFAC assessed over $1.5 billion in penalties. High-profile cases include nearly $1 billion against Binance and over $500 million against British American Tobacco for violations related to sanctioned countries. Even smaller companies like Aiotec GmbH have faced multi-million-dollar fines for violating U.S. sanctions through indirect or poorly vetted transactions.
These cases reinforce the importance of continuous vigilance, even in routine business operations like vendor payments.
Final Reminder
If your department processes payments, you are on the front line of sanctions compliance. Failing to screen vendors could result in serious violations—even if the payment seems routine and even if the vendor appears reputable.
Do not assume compliance—verify it.
To learn how VendorInfo automatically handles OFAC screening for organizations, contact us.