OFAC Compliance: Pay Creators in Sanctioned Countries Safely

For businesses and individuals looking to engage with global talent, navigating OFAC compliance when paying creators in sanctioned countries is both crucial and complex. With evolving regulations and sophisticated enforcement, understanding how to pay creators legally while minimizing risk is essential. Discover the essential steps you need to boost compliance while supporting international creators.

Understanding OFAC and Sanctioned Countries

The Office of Foreign Assets Control (OFAC) is a division of the U.S. Department of the Treasury that administers and enforces economic and trade sanctions. These sanctions apply to countries, entities, and individuals linked to concerns such as national security, foreign policy threats, and violations of international law. As of 2025, major sanctioned countries include Iran, North Korea, Cuba, Syria, and some regions of Russia and Belarus, with lists updated frequently to reflect geopolitical realities.

Sanctions range from comprehensive embargoes covering all financial transactions to more targeted restrictions on specific industries or individuals. Understanding the specific regulations relevant to your business activities is foundational for staying compliant. Failure to comply—even accidentally—can result in severe financial penalties, reputation damage, or even criminal charges.

Risks of Non-Compliance With OFAC Sanctions

Non-compliance with OFAC sanctions carries significant risk. Civil penalties in 2025 can exceed $330,000 per violation, and criminal charges may result in prison sentences. Recent enforcement data shows that U.S. authorities are aggressively pursuing even minor violations related to digital payments and freelance contracts.

Risks include:

• Financial Penalties: Enforcement actions are increasingly automatic, leveraging sophisticated technology to flag violations.
• Business Disruption: Banks and payment providers may freeze accounts associated with flagged payments, stalling cash flow.
• Reputational Damage: Public enforcement cases can harm your brand and erode client or partner trust.
• Legal Consequences: Ignorance is not a defense—companies are expected to demonstrate proactive compliance systems.

Avoiding these risks requires a proactive, educated approach to compliance, especially when working with content creators across borders.

Screening Creators and Payments Against OFAC Lists

A key step in OFAC compliance is effective screening. OFAC maintains the Specially Designated Nationals (SDN) list and other lists identifying sanctioned individuals, companies, and financial institutions. Before engaging any creator, you must:

1. Collect Information: Obtain full legal names, addresses, and where possible, government ID details of your creators.
2. Automate Screening: Use reliable compliance software or financial partners who integrate SDN and Country lists for real-time checks.
3. Continuous Monitoring: Sanctions are updated without warning. Schedule regular re-screening to catch mid-engagement listing changes.

Avoid assumptions based on payment methods or creative platforms. Even if a creator uses an intermediary service or pseudonym, responsibility for compliance lies with the paying party.

Best Practices for Payment Processing Within OFAC Guidelines

Paying creators in sanctioned countries is subject to strict limitations, but certain categories—such as informational materials and some cultural exchanges—may be allowed under General Licenses. Here are best practices to keep payments compliant:

• Understand General Licenses: Review OFAC’s General Licenses for your target country. In some cases, payment for original artistic or informational content may be permitted with specific conditions.
• Document All Payments: Maintain robust records, noting the purpose of each payment, creator identification, and proof of permissible activity.
• Leverage Licensed Intermediaries: Some platforms and financial institutions are licensed by OFAC to facilitate limited cross-border payments. Confirm their license status and compliance protocols before use.
• Avoid Prohibited Facilitation: Do not attempt to reroute payments through third countries or use cryptocurrency to bypass controls—OFAC considers “facilitation” a violation, even if indirect.
• Seek Case-by-Case Advice: For complex scenarios or novel content, consult an experienced sanctions attorney or request guidance from OFAC directly.

Modern compliance tools integrate sanctions screening into onboarding and payment workflows, reducing error and building an audit trail. Investing in such systems is recommended for any business working with global creators.

Obtaining OFAC Licenses for Exceptions

In situations not covered by General Licenses, it may be possible to apply for a Specific License from OFAC. This allows customized exceptions for transactions with a sanctioned party, often for humanitarian, journalistic, or educational projects.

• Submit an Application: Detailed proposals covering transaction partners, purpose, methods, and anticipated outcomes improve approval odds.
• Timelines: As of 2025, processing times average two to six months, depending on complexity and risk.
• Compliance Obligations: Even when granted, Specific Licenses require ongoing reporting and vigilance to remain within their scope.

Unless a General License clearly covers your scenario, do not pay creators in sanctioned countries without this formal approval. Voluntary disclosure of inadvertent violations can sometimes mitigate penalties.

Building a Robust OFAC Compliance Program

Organizations that regularly pay cross-border creators should implement a structured OFAC compliance framework that includes not just screening but also employee training, regular audits, and clear escalation procedures. Modern best practices include:

• Written Policies: Document workflows, escalation points, and responsibilities for each team involved in payment processing.
• Employee Training: Train all staff involved in payment approvals on current OFAC regulations and warning signs of non-compliance.
• Third-Party Risk Management: Regularly assess the compliance posture of contractors, partners, and platforms you use for payments and creative engagement.
• Audit Trails and Reporting: Maintain detailed records for at least five years to respond quickly to regulatory requests.

Engaging legal counsel familiar with the digital economy and sanctions law is a wise investment, especially as enforcement expands in scope and sophistication.

Conclusion

OFAC compliance when paying creators in sanctioned countries requires vigilance, updated knowledge, and reliable systems. By integrating robust screening, sound documentation, and clear policies, businesses can support international creativity while avoiding significant legal risk. Prioritize compliance for lasting, trustworthy cross-border collaboration.

FAQs About OFAC Compliance When Paying Creators in Sanctioned Countries

• Can I pay a creator in a sanctioned country via PayPal, Wise, or cryptocurrency?
  
  No. Most common payment platforms block transfers to sanctioned countries in line with OFAC regulations. Bypassing controls—such as sending crypto or using third-country intermediaries—still constitutes a violation.
• Are there any exceptions for artistic or informational content?
  
  Yes. Some General Licenses allow payment for certain informational materials to promote freedom of expression. However, scope is limited and documentation is critical.
• What happens if a recipient is added to the SDN list mid-project?
  
  All payments must stop immediately unless a license is secured. OFAC expects prompt action to prevent further violations, regardless of previous status.
• Does OFAC only apply to U.S. companies?
  
  No. OFAC can pursue non-U.S. companies if their transactions involve U.S. persons, U.S. dollars, or U.S.-regulated financial systems.
• How often are sanctions lists updated?
  
  Updates occur frequently and without warning. Businesses should use real-time or regularly refreshed screening tools as part of compliance protocols.