What is the purpose of the Specially Designed Nationals List maintained by OFAC?

The Specially Designed Nationals List (SDN List) maintained by the Office of Foreign Assets Control (OFAC) serves to prohibit U.S. individuals, companies, and financial institutions from conducting business with designated individuals and entities that are subject to sanctions. This list includes individuals, organizations, and governments that are considered to pose a national security risk, engage in terrorism, narcotics trafficking, or other activities that may undermine U.S. foreign policy or national interests.

When the answer identifies the purpose of the SDN List as prohibiting business with sanctioned entities, it highlights the key role of this list in upholding U.S. law and regulations regarding economic sanctions. Entities on this list have been specifically identified as engaging in forbidden activities or being associated with governments or groups the U.S. does not support.

The other options do not accurately capture the primary purpose of the Specially Designed Nationals List. Tracking all financial institutions, verifying customer identities, or providing a directory of legitimate businesses does not reflect the specific function of enforcing economic sanctions and maintaining national security as outlined by OFAC. Thus, the correct answer emphasizes the crucial role of the SDN List in regulating which entities U.S. businesses can engage with.