OFAC compliance
Defense and government contractors face OFAC compliance obligations that go well beyond standard sanctions screening, with the Office of Foreign Assets Control and the Defense Contract Audit Agency both scrutinizing vendor networks, foreign subcontractor relationships, and beneficial ownership disclosures at the contract level. A 2023 OFAC enforcement pattern targeting defense-adjacent firms for third-party exposure through foreign national distributors put the sector on notice that indirect dealings count. Compliance teams are now mapping subcontractor chains against the SDN List and reviewing foreign military sales agreements for prohibited-party exposure before contract renewals land.
Watch
- OFAC 50 Percent Rule: beneficial ownership screening for foreign subcontractors
- DCAA audits increasingly flagging SDN-adjacent vendor payments in contract reviews
- FAR 52.225-26 compliance gaps in contractor-supplied foreign national labor arrangements
- Proposed expansion of sectoral sanctions to defense-adjacent technology supply chains
- Russia/Belarus prohibitions: active enforcement against indirect procurement pathways
Recent material activity in Defense & Government Contracting
Active monitoring in place across Defense & Government Contracting. Material developments related to ofac compliance will appear here as they are published.