When to Do an OFAC Check

The bottom line on OFAC compliance is that you don't want to do business with an OFAC-sanctioned party. There are no regulatory specifications requiring a bank to check any group of transaction types against the OFAC lists. That is a business policy decision a bank should make after assessing the risks involved. The bank weighs the risks of violating the OFAC rules, any mitigating controls it already has in place, and the costs of adding additional controls (checks against the OFAC lists, for example), and determines its policies. That would include the risk of making an accounts-payable payment to an OFAC-sanctioned party.

First published on BankersOnline.com 5/10/10