New Account opening: When you obtain a hit on OFAC on an account you are opening, should you reject opening the account or open the account, freeze the funds, research the hit to ensure it is an actual hit for OFAC purpose? Is there guidance on this?

http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#22

42. What do I do if a person tries to open an account and the person's name is on OFAC's SDN list? Do I open the account and then block the funds?

A U.S. bank cannot open an account for a person named on the SDN list. This is a prohibited service. However, you should pay careful attention to be sure the person trying to open the account is the same person as the one named on OFAC's list. In many cases you may get a "false positive," where the name is similar to a target's name, but the rest of the information provided by the applicant does not match the descriptor information on OFAC's SDN list. If the bank does come into the possession or control of any property in which a blocked person has an interest, it is obligated to block that property. In other words, if you receive an application to open an account from a person who matches the information on the SDN list, together with an opening deposit, you are obligated to block the funds. The same is true for other banking transactions. If, for example, a customer asks if he or she is allowed to send money to a relative's account with Bank of XYZ in Sudan, the bank can say "no, that's illegal." If, on the other hand, a bank receives instructions from its customer to debit his or her account and send the funds to Bank of XYZ, the bank must act on the instructions by blocking the funds which contain a future interest of the Sudanese SDN bank. You might think of the analogy of a bouncing ball. Once the ball starts moving, you must stop it if it comes into your possession.

Thank you!

Clarification needed on whether you have 10 calendar days or 10 business days to report to OFAC a blocked or rejected transaction?

Q&A #36 in the above link.

Would this include any type transaction that would possibly need to be blocked or rejected?

#49

On the #42. It states if you receive an application along with a deposit to open an account for a person on the SDN list you are obligated to block the funds. First sentence states that a bank cannot open an account for a person that names is found on the SDN list.

Blocking funds and opening an account for the individual are two different things.