So, we have a cashier's check that is a potential OFAC match. The CC hasn't cleared yet, and I called OFAC for direction. However, with the gov't shutdown, they are closed. Am I allowed to call the customer for more information in order to clear the alert?

Since the money is out the door, what do you plan to do even if you get more information? If you are going to bother to check OFAC when issuing CCs, that needs to be done prior to issue.

The check has not cleared yet. I would most likely cancel the check and refund the money. Our current system doesn't allow us to check OFAC prior to issuing, but we scrub once a week to see what we issued. It's backwards and not the way I'd set it up if I had been the one to do so. However, this experience has been enough for me to address it with the powers that be on the processing/teller side.

if you determine it was an OFAC match, canceling the check and refunding the customer is not the correct path to take. you certainly can cancel the check (leading to additional issues and potential liability to the bank from the payee), but you would need t hold the funds in an interest bearing account until OFAC gives license to release.

and you need to look at how to review these prior to issuing to reduce your risk.

Correct, the funds now belong to the payee.

It is easy to perform the check before issuing. Use the OFAC site. https://sanctionssearch.ofac.treas.gov/ It is independent of what your current system is able to do.

That's not the issue. The issue is a teller manager and CEO who think BSA is a nuisance and a bunch of hogwash. I was actually asked if we'd be in serious trouble if we had to report an actual OFAC match. I informed him that if we had an actual match, even once, we'd be dealing with fines and issues for being in violation.

That is very true as if they are a match, you already conducted the transaction - even if you are still able to seize the funds. The only option would be to fess up to OFAC and throw yourself on the mercy of the court as far as fines and the publicity it would generate.

By the way - just curious - how much was the check??

$150.

I'm not concerned that it is a true match. We've never had one (and I know there's always a first...) but we have 3 businesses within our footprint with the same initials as the match. I'm convinced it's going to one of these places. It's just frustrating when all I have is the initials of the company and it's a potential match to a company in Iran.

We had a similar situation for a $5 check that was a potential match but was really a child support document fee going to the local county for a domestic issue.

Something else to consider with OFAC. Everything OFAC is risk based. In order for the check to be negotiated, it has to be deposited at a US Bank. How likely is it that the bank that accepts the check for deposit is banking a business on the OFAC list. Yes there’s always the possibility of a currency exchange cashing it or someone depositing it via RDC to a different business account, but based on these mitigating factors, I have some clients that elect not to search names of payees any more than you would try to search the names of all th checks your customers write to third parties.

Ding, ding, ding, this should be your biggest concern..... not many can pull off stripes or orange, just sayin'.....

Unless if they mailed it overseas - where most of the OFAC parties are located

well, that is true, at least the nuisance and hogwash part, but at the end of the day you better make sure your bank has a procedure in place and it is being followed or you will be in deep stuff...google "ofac violation fines" and print a few of the outcomes and provide to the CEO and teller manager for their reading enjoyment. and if your bank has a BSA officer, or it that is you, it should be escalated to the Board if the CEO is putting the bank at risk by ignoring regulations.