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New Accounts: Handling an OFAC Hit
Answer by Lucy Griffin, BOL Guru
BIO AND CONTACT INFO
Question: What is the proper way to handle a situation where you are opening up a new account for a new customer and their name shows up on your OFAC list? Do you continue your opening process and then report them to the proper authorities or do you stop immediately and turn the customer away?
Answer: There are two answers to this question. The first is the strict legal correctness answer. OFAC usually wants you to block the transaction by not opening the account.
Practical considerations raise the second answer to this question. Telling a person to his or her face, in the bank's lobby, that you won't open an account for them because they are on the terrorist list is not something that you generally want your front line staff to do -- or to be in the position of doing. For that reason, the practical approach is to open the account and freeze the deposit. Then tell OFAC that you have the funds.
Employee safety comes first.
First published on BankersOnline.com 9/29/03
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