Our OFAC checking software does not identify some a/k/a names of SDNs because the a/k/a names are embedded in the "Remarks" field of the data file. The vendor is telling us this is okay because OFAC considers a/k/a names in the Remarks field to be "weak" OFAC hits. I always thought that we had to check transactions against all names on the SDN list. Has anyone else come across this?

I would defer to your vendor for additional guidance. Our system "rates" the hits. 1 being a low priority and 3 being a match. The customers that we have gotten a 2 on we have done additional procedures to verify that it wasn't the person on the SDN/OFAC list.

I understand what you are saying, but if I understand our vendor correctly, their software does not even search against some of the a/k/a names, so it appears to me we run the risk of processing a transaction for a SDN that appears as a a/k/a name on the SDN list.

IMO then, you should address this in your risk assessment. Is your FI willing to accept the risk that your vendor is not checking everything and relying on that? Maybe its time for a different vendor? Have you asked the vendor why they don't check that information?

If you end up having an OFAC match that went undetected...that won't be good.