Discovering past transaction from current OFAC list

Question: What should we do if we discover that we have conducted a transaction for an individual that OFAC just added to the list? Should we cancel the transaction? Are we liable for having conducted the transaction?

Answer: Conducting a transaction for an individual before that individual is placed on OFAC's lists is not a violation of OFAC rules. However, conducting another transaction for that individual after the name appears on OFAC's list would be a violation.

What you should do depends on the nature of the transaction. If you sent a wire at the customer's request several months before the name appeared on the list, you can't undo that transaction. However, if the transaction to which you refer was opening a deposit account, you should now freeze all funds in that account - and any new deposits. It would also be wise to contact OFAC and tell them about the transactions. Finally, file a Suspicious Activity Report to create a paper trail for investigators.

Copyright © 2002 Compliance Action. Originally appeared in Compliance Action, Vol. 7, No. 4, 5/02