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#630503 - 10/27/06 01:16 PM HELP! OFAC Guidance Needed
Tocomply Offline
Platinum Poster
Joined: Nov 2004
Posts: 650
We received a 602 letter from OFAC. I spoke with someone at OFAC (yes they actually answered) and was told this was a subpoena. It's not, and in the letter they are not asking for anything but to confirm and account number and name. The name of the account they provide does not match the name on the account at our institution. This guy is being very difficult and saying I have to disclose everything on the account we have. It's not the same name and we can't tie it to the name in the letter. What should I do? Our legal dept. said do not send any information. I've been searching all morning and can't find a description of a 602 letter.

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#630504 - 10/27/06 02:08 PM Re: HELP! OFAC Guidance Needed
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 3,997
New York City
This is what information I could find on an OFAC 602 Letter. Is it possible your FI processed a transaction for a prohibited party? Also, while this is only my interpretation, it looks like you must respond to this inquiry. However, I would definately confirm this with Bank Counsel.

When it comes to OFAC’s attention that an illicit transaction was
processed through a U.S. bank, without being blocked or rejected, as
appropriate, OFAC normally sends an administrative demand for
information, called a “602 letter,” to the bank requesting an explanation
of how the transaction was processed. Upon receipt of the bank’s
response to this letter, the case may be referred to the Civil Penalties
Division, which issues a “Prepenalty Notice” citing the violation and
stating the amount of the proposed penalty. The bank then has thirty days
to make a written presentation as to why a penalty should not be imposed,
or, if imposed, why it should be in a lesser amount than proposed. It is
critical for banks to answer such “Prepenalty Notices” since failure to
respond may result in default judgements levying maximum fines.
Mitigating factors in Civil Penalty procedures include self-disclosure,
the use and sophistication of interdict software, and other bank
compliance initiatives. TWEA civil penalty and forfeiture proceedings
include the opportunity for an administrative hearing and pre-hearing
discovery prior to imposition of a penalty or forfeiture.
2 September 28, 2006 Department of the Treasury
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#630505 - 10/27/06 05:32 PM Re: HELP! OFAC Guidance Needed
Tocomply Offline
Platinum Poster
Joined: Nov 2004
Posts: 650
My issue is we did respond and they are now saying that a 602 letter is a subpoena and we should of gave them copies of the file that did not match their inquiry and our monitoring procedures. I responded. I'm now sending this off to our legal folks again.

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