The Office of Foreign Assets Control ("OFAC")

of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction

OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under US jurisdiction.

Overall OFAC Compliance Objectives

Because each sanctions program is based on a unique set of foreign policy imperatives, no two are exactly alike. However, in developing OFAC compliance procedures, you should focus on one overriding objective: to provide enough information to key staff members in all operations to enable them to recognize and stop suspect transactions for further review by the individual ultimately responsible for OFAC compliance at your bank.

Valid OFAC 'hits' may need to be blocked or rejected, depending on the nature of the transaction and the applicable regulations. Deciding whether to block or reject can be difficult. Your bank's main compliance responsibility is to ensure that suspect items are interdicted. OFAC will help you determine whether an interdicted transaction ought to be processed, blocked, or rejected.
 

Source: http://www.ustreas.gov/offices/enforcement/ofac/articles/abamag.pdf