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OFAC Check on All Parties in a Wire Transfer?
Answer by Jim Bedsole, BOL Guru
Guru Bios
Question: Our recent examiner said we must check OFAC on all parties included on each wire transfer. We were a little confused on this one, can you help?
Answer: First, you are not required to check any party for OFAC. You are just not allowed to process any transaction that would have OFAC implications. How you choose to manage that is a risk management decision that you must make. You have to decide whether the risk that a person associated with the wire (originator, beneficiary, or intermediary) is on the OFAC sanction list is outweighed by the cost associated with performing the check. This is true not only for wires, but for every transaction in the bank.
At a minimum, your examiner should expect you to have a risk assessment for each type of transaction that outlines what your assessed risk is and what your approach regarding checking the OFAC list will be. For example, if you determined that the risk of a domestic intermediary being on the list was sufficiently small, you could make the risk decision that you would not check that against the OFAC list, but you'd want to have that decision documented and supported by the risk assessment.
First published on BankersOnline.com 9/11/06
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