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OFAC Check and Accounts Payable Issue

Question: 
I have been looking for guidance on an OFAC issue that i have tried to research but I am not having luck finding anything on an Accounts Payable issue I am having at the bank where I have been appointed BSA Officer. I recommended that the AP department at our bank perform an OFAC check on any vendor that we start doing business with. They said they won't do that because our data processor runs a monthly report that performs an OFAC check on vendors that we have issued a check to. We have a difference in opinion about when the OFAC check should be performed. Please advise or tell me where I can find further information.
Answer: 

OFAC compliance; i.e. checking the list, is risk based and depends on the individual bank's risk assessment. There is no legal requirement to check the OFAC list under any circumstance nor is there any guidance published on each of the myriad of circumstances where banks might choose to check the list.

You and your AP department have a difference of opinion. In the incredibly unlikely event that one of your vendors is an SDN or directs a payment to an SDN locale, OFAC will likely say that your opinion was correct.

First published on 01/27/2014

Filed under: 
Compliance
Filed under compliance as: 
OFAC

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