Table of Contents
If you export from the United States, three agencies shape your work. The OFAC vs BIS vs State question comes up a lot. Each one runs different rules and different lists. Mix them up and you risk a fine or a blocked shipment.
This guide keeps it simple. You will learn who each agency is, what it controls, and which lists it runs. That way you screen the right names against the right sources. It ties straight into your denied party screening process.
The three agencies at a glance
All three sit inside the U.S. government. But they live in different departments. Their jobs overlap in places. They also have clear lanes.
- OFAC sits in the Treasury Department. It runs financial sanctions.
- BIS sits in the Commerce Department. It runs export controls for most commercial goods.
- State sits in the State Department. It controls defense articles and services.
Sanctions and export controls are not the same thing. If that split is new to you, read the difference between export controls and sanctions first. It makes the rest of this easier.
OFAC: sanctions and money flows
OFAC stands for the Office of Foreign Assets Control. It is part of the U.S. Treasury. OFAC targets people, companies, and whole countries. Its focus is money and property.
When OFAC lists a party, U.S. persons must block their assets. You cannot deal with them at all in most cases. This reaches banks, exporters, and importers alike. It even reaches some non-U.S. firms that touch U.S. dollars or U.S. goods.
Lists OFAC runs
The main one is the SDN List. SDN means Specially Designated Nationals and Blocked Persons. You can read more on the OFAC SDN List. OFAC also runs other sanctions lists, like the Sectoral Sanctions and Non-SDN lists.
One OFAC rule catches many people. If a blocked party owns 50 percent or more of a company, that company is blocked too. It may not appear on any list by name. See the 50 percent rule for sanctions for the detail.
BIS: export controls on commercial goods
BIS stands for the Bureau of Industry and Security. It is part of the Commerce Department. BIS runs the Export Administration Regulations, known as the EAR. Most commercial and dual-use items fall here.
Dual-use means an item has both civil and military uses. A chip, a sensor, or software can qualify. BIS decides if you need a license to ship it. Your item’s ECCN drives that answer. Learn how to determine an ECCN number when you are ready.
Lists BIS runs
- Entity List: parties that pose a national security or foreign policy concern. See the BIS Entity List.
- Denied Persons List: parties stripped of export privileges. See the Denied Persons List.
- Unverified List: parties BIS could not fully check. See the Unverified List.
Each list carries its own rules. The Entity List may require a license for items that would otherwise ship freely. The Denied Persons List blocks almost all export dealings. The Unverified List adds diligence steps before you ship.
State: defense trade and ITAR
The State Department controls defense articles and services. It does this through the Directorate of Defense Trade Controls, or DDTC. The rulebook is the ITAR. That stands for the International Traffic in Arms Regulations.
ITAR covers military items on the U.S. Munitions List. Think weapons, military aircraft parts, and some related technical data. If your product is defense-related, State is your agency. Many firms never touch ITAR. Those that do must register with DDTC.
Lists State runs
State publishes debarred parties. These are people and firms barred from defense trade. The ban often follows an ITAR violation or a criminal conviction. If a party is debarred, you cannot involve them in ITAR exports.
Side-by-side comparison
This table sums up the split. Keep it near your desk when you screen.
| Agency | Department | Main job | Rulebook | Key lists |
|---|---|---|---|---|
| OFAC | Treasury | Financial sanctions | Sanctions programs | SDN List and other sanctions lists |
| BIS | Commerce | Export controls on commercial and dual-use goods | EAR | Entity List, Denied Persons List, Unverified List |
| State | State (DDTC) | Defense trade | ITAR | Debarred parties list |
How to screen against all three
You do not want three separate checks by hand. The U.S. government bundles many lists into one place. It is called the Consolidated Screening List. It pulls together OFAC, BIS, and State entries. Read about the Consolidated Screening List to see what it holds.
Note one gap. The Consolidated Screening List does not apply the OFAC 50 percent rule for you. It also may not carry every OFAC program. So do not treat one search as full coverage. Build a repeatable method and follow it every time. Our guide on how to run denied party screening walks through the steps.
Frequently Asked Questions
Do I need to screen against all three agencies?
Most exporters should. OFAC and BIS lists touch nearly every trade. State matters only if you handle defense items. When in doubt, screen wide. Missing a party is worse than an extra check.
Which agency handles country embargoes?
OFAC leads on country and regional sanctions. BIS also restricts exports to some destinations under the EAR. The two work together on many programs. Check both when a country is involved.
What happens if I deal with a listed party?
The cost can be steep. You may face fines, lost export privileges, or worse. See the penalties for dealing with a denied party. Screening before you deal is far cheaper than a violation.
Key Takeaways
Remember the lanes. OFAC runs financial sanctions and the SDN List from Treasury. BIS runs export controls and its three lists from Commerce. State runs defense trade and ITAR debarments. Screen against all the lists that fit your trade, apply the OFAC 50 percent rule, and keep records. If you want help setting up a clean process, contact the Globalior team.