Click to return to BOL home page
Banker Store Read A Reg BOL Insiders Career Connect Learning Connect Bankers Information Network

Search BankersOnline
using Google

MAIN CONTENT 
Compliance

    Agency Road Maps

    Alphabet Soup

    Compliance Tools

    FACTA/FCRA

    OFAC

Lending

    FACTA/FCRA

    Lending Tools

    SCRA

Marketing

Operations

    Check 21

    Operations Tools

    SAR Resrch Guide

Security

    AML/BSA

    Bank Robbery

    Counterfeits

    ID Fraud/Phishing

    Security Tools

Technology/eBanking

    Info Security


SPECIAL AREAS 
BOL Archives

BOL Blogs

Briefing Archive

Calendar

Court Watch

e-Card Exchange

Examiner's Corner

Executive Briefing

HR Corner

Infovault

Launch Pad

Regulator Roadmaps

Risk Management

Site Map

Site Orientation

Top Stories


~ ~ ~
SERVICES 
CrimeDex

Em@il Education

ID Verification


~ ~ ~
SHOP 

Banker Store

Bankers Info Ntwk

CONNECT 

Career Connect

Learning Connect

Guru Central

INTERACT 

Ask a Guru
Bankers Threads

Contact Us

Give Us Feedback


TOOLS 


60 Second Solutions

Alphabet Soup

Banker Tools

BOL Forms

FUN 

BOL Recipes

eCard Exchange

LEARN MORE 


About Our Sponsors
About Us





Print Friendly! Email This Article! Discuss NOW!


OFACís Multiple Watch Lists
Answer by Kristine Regele, CAMS, Sr. Compliance Analyst - ChoicePoint


Question:  Is there more to OFAC compliance than the SDN watch list?

Answer:  Whether using software to automate your OFAC scanning, or completing this task manually, you should make sure that you have access to all of OFACís watch lists. This article provides a brief review of the watch lists involved in OFAC compliance.

Country Sanctions Programs
OFAC administers a number of U.S. economic sanctions targeted against geographic regions (such as countries), governments of those regions, and/or individuals associated with such jurisdictions or governmental regimes. The following countries comprise OFACís index1 of country sanctions programs:

* Balkans * Belarus * Burma
* Cuba * Cote d'Ivoire * Democratic Republic of the Congo
* Iraq * Iran * Former Liberian Regime of Charles Taylor
* North Korea * Sudan * Syria
* Zimbabwe  

Whether searching manually or using an automated screening product, you may not want to be alerted to every one of the countries on the index. For example, letís analyze the Zimbabwe program. The Zimbabwe sanctions overview2 explains that the program targets "specifically identified individuals and entities in Zimbabwe"3 and states that those individuals "are all incorporated into OFACís list of Specially Designated Nationals (SDNs)."4 Further, the overview explains, "Transactions that do not involve any of the Zimbabwe SDNsÖ are not prohibited by the new Executive Order."5

Therefore, even though the name Zimbabwe appears on the Index, OFAC makes it clear that the program focuses on specific individuals, not on the entire country.6 It is reasonable then, that banks conducting manual checking do not scan for "Zimbabwe" and that software solutions use the same approach.

OFAC List-Based Sanctions Programs
OFAC also administers the following economic sanctions programs that are not specific to a given country.

* Anti-Terrorism * Counter Narcotics Trafficking
* Non-Proliferation
  (Weapons of Mass Destruction   (WMD))
* Diamond Trading

The current programs in this category target entities and individuals known to participate in very specific international criminal activities. Individuals involved in these activities (such as foreign drug traffickers, foreign terrorists, etc.) would likely move from country to country, remaining far from where they might be expected to be located. Generally speaking, entities designated on the list-based sanctions programs are also named on the SDN list. However, this is not true for all entities under the WMD sanctions program. Therefore, the WMD entities may comprise a separate OFAC watch list.

Specially Designated Nationals and Blocked Persons (SDN list)
OFAC administers a number of programs under which certain individuals or companies are designated as SDNs. As stated in our discussion of Zimbabwe, OFAC designates certain individuals and companies owned or controlled by, or believed to be acting on behalf of, targeted countries or jurisdictions. As discussed in our section titled, "OFAC List-Based Sanctions Programs, OFAC also designates individuals or other entities to the SDN list through programs that are not country-specific. In fact, OFAC administers over 20 different programs, the majority of which can lead to SDN designations. Collectively, these designated entities comprise what is called the SDN List. OFAC disseminates the SDN list in multiple formats, such as PDF suited for reading and electronic formats (fixed field/delimited files) suited to database integration.

The assets of SDNs "are blocked and U.S. persons are generally prohibited from dealing with them."7 However, there are certain entities on OFACís SDN list for whom blocking is not required.8

Palestinian Authority and the PLC list
ChoicePoint suggests that you consult legal counsel, your regulator, or OFAC9 about interpreting these regulations or designing compliance program components. The sanctions programs relating to conducting business in Palestine continue to evolve because of the changing political situation with the Palestinian Authority and the Palestinian Legislative Council (PLC). On June 28, 2007, OFAC published new guidelines with regard to the Palestinian Authority.10 Their publication, titled "Guidelines on Transactions with the Palestinian Authority," refers to a series of general licenses which can be researched from links on OFACís Terrorism Sanctions Web page.11

Summary
Whether you check against the OFAC lists manually, or automate this task using compliance software, it is critical that you access all of OFACís watch lists and sanctions programs. Because OFAC's programs are dynamic and constantly changing, it is also very important to check for updates to the lists and programs on a regular basis. Checking watch lists alone does not the only step necessary for compliance; after validating a match, a decision must be made about required actions. Get this wrong, and you risk non-compliance. Therefore, it is also important that you are confident that you possess complete information regarding current restrictions.

Bridger Insightô XG is a sophisticated, easy to use identity risk management and USA PATRIOT Act and OFAC compliance product suite. Designed for cost-effective, efficient customer screening and reporting, this product is trusted by the majority of the top 25 U.S. banks and over 4,000 clients. Bridger Insight XG facilitates streamlined identity verification, identity fraud and theft mitigation, due diligence investigations and extensive watch list screening.

Learn more Bridger Insight XG, whereby you can easily scan against the SDN OFAC list and more than 20 other watch lists or get your FREE OFAC white paper entitled "Practical OFAC Principles".

About ChoicePoint
ChoicePoint (NYSE: CPS) provides businesses, government agencies and non-profit organizations with technology, software, information and marketing services to help manage economic and physical risks as well as identify business opportunities. Each year, we help more than 100 million people who are seeking to obtain jobs, fairly priced home and auto insurance, and who wish to rent apartments. Our authentication and anti-fraud tools improve efficiency and instill confidence in the decision-making process for our customers and consumers. Consumers have free access to the reports we create at www.ChoiceTrust.com. Learn what we do to protect consumer privacy by visiting www.PrivacyatChoicePoint.com and, for more information on our company, go to www.ChoicePoint.com.


1U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), OFAC Country Sanctions Programs, June 2007, http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml, (Jun 2007).
2 OFAC, Zimbabwe, What You Need To Know About U.S. Sanctions, May 2006, http://www.treas.gov/offices/enforcement/ofac/programs/zimbabwe/zimb.pdf, (Jun 2007).
3Ibid.
4Ibid.
5Ibid.
6Ibid.
7OFAC, Frequently Asked Questions: What is an SDN?, Sept 2002, http://www.treas.gov/offices/enforcement/ofac/faq/answer.shtml#17, (Jun 2007).
8 Refer to the instructions preceding certain sections of the most recent SDN list, for example, the instructions regarding Iranian Banks or instructions for Vessels at http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf, (Jun 2007).
9OFAC regulatory hotline: 1-800-540-6322
10OFAC, Guidelines on Transactions with the Palestinian Authority, Jun 2007, http://www.treas.gov/offices/enforcement/ofac/programs/terror/ns/pal_guide.pdf, (Jul 2, 2007).
11OFAC, Sanctions Programs, Jun 2007, http://www.treas.gov/offices/enforcement/ofac/programs/terror/terror.shtml, (Jul 2, 2007).


First published on BankersOnline.com 7/16/07









Privacy Policy    Disclaimer   Recommend This Site !   Contact Us


BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.