Your Guide to OFAC Screening Requirements

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The Office of Foreign Assets Control (OFAC) is a division of the US Treasury. Its primary role is financial intelligence and administering and enforcing the financial institutions’ compliance with US sanctions. The agency ensures that financial institutions self-impose financial screenings to identify parties listed as “blocked.” The YouTube video delves deeper into the topic.

Understanding OFAC Screening Requirements

As mentioned, the agency ensures that financial institutions impose OFAC screening requirements on applicants to ensure they avoid economic and trade sanction violations. The goal is to ensure compliance and support for foreign policy objectives and US National Security.

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OFAC operates under the Office of Terrorism and Financial Intelligence. Attorneys and intelligence officers staff this department.

Your financial institution has an obligation, under OFAC regulations, not to conduct business with individuals, entities, or countries found on the OFAC’s Specially Designated Nationals (SDN) List. Financial institutions may use screening software or services to check the names, addresses, or other identifying information against the SDN list. Due diligence on potential customers is crucial because it ensures the financial institution does not engage in business with an individual or entity on OFAC’s list.

Institutions should implement transaction screening and monitor all transactions to identify any suspicious activity that may violate OFAC regulations. Lastly, financial institutions should keep all records of OFAC transactions and compliance efforts and foster a culture of awareness and compliance.


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