Answer:
There is no specific requirement in any law or regulation that you do OFAC checks on anyone. The law and regulations prohibit you from accepting transactions from some OFAC-listed parties and require you to block access to the assets of other OFAC-listed parties. If you err and complete a transaction with or allow assets to be used by an OFAC-listed party, you can be subject to substantial fines. The level of fines can depend on the adequacy of your OFAC screening program and training -- the efforts your bank makes to avoid breaking the law.
Your bank should analyze the risk of an infraction as to transaction types that it handles, the persons (entities and individuals) with which it deals and the business environment. The result of that analysis should be a policy and procedures designed to balance the risk of an infraction and the cost of avoiding the same. That would apply to transactions involving real estate sales and the parties involved in those sales.
Given the comparatively large dollar amounts involved in real estate transactions, and the relative ease of checking the parties, I imagine that your institution's analysis will suggest that these parties get checked.
First published on BankersOnline.com 4/16/07
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