What is an OFAC screening?
OFAC Search (also known as OFAC Screening, OFAC Scrubbing, and OFAC List Screening) is the process by which organizations identify whether or not any parties involved in a transaction can be found on watch lists maintained by the Office of Foreign Assets Control (OFAC), a division of U.S. Department of the Treasury.
What is included in an OFAC search?
OFAC publishes lists of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.
What are OFAC requirements?
In general, the regulations that OFAC administers require banks to do the following:
- Block accounts and other property of specified countries, entities, and individuals.
- Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals.
Who must be screened OFAC?
The Specially Designated Nationals and Blocked Persons List (SDN List)
- Twelve individuals: three with U.S. dual citizenship or temporary/permanent resident status; and nine foreign individuals w.
- Forty-five U.S. companies: all defunct shell companies established by narcotics traffickers.
Who is responsible for spotting OFAC red flags?
The “Red Flags Rule” is a set of regulatory requirements outlined in the Fair and Accurate Credit Transactions Act (FACTA) and enforced by the Federal Trade Commission.
How do you run an OFAC check?
You can look up a person’s or company’s name in an OFAC search on the U.S. Treasury’s website. All documents are public and easy to access. They are updated when necessary and there are records of post information. There will be a check on the person’s or company’s name against the Specially Designated National list.
What is an OFAC 602 letter?
When it comes to OFAC’s attention that an illicit transaction was processed through a U.S. bank, without being blocked or rejected, as appropriate, OFAC normally sends an administrative demand for information, called a “602 letter,” to the bank requesting an explanation of how the transaction was processed.
What is a red flag check?
Red Flag compliance involves a variety of system checks aimed at detecting specific “red flags” and preventing possible cases of identity theft.
Who in a financial institution is ultimately responsible for OFAC compliance?
The directors and officers of financial industry participants are ultimately responsible for ensuring that their entities maintain effective BSA/OFAC compliance programs, which must be approved by the board of directors and noted in the board minutes.