A recent discussion has arisen in regards to checking govt. agencies against the OFAC list. Is it a requirement of OFAC to check these agencies when opening an account or not. Please someone settle this for me.

There is no requirement to check anyone against the list, you just don't want to be found to have done a transaction with someone on the list. For this reason you should do a risk assessment and look at various factors, such as your location, customer base, products and services, etc. to determine (and have BOD approval) on what you should be checking.

Are you talking about US government agencies? The OFAC list is all foreign entities. I would say there is minimal risk in dealing with a US government agency and would not run them against OFAC.

If you mean foreign government agencies and people working for those agencies, I would consider them high risk and ALWAYS check them for OFAC (and World-Check to pick up on any PEP/SFPF).

I suppose that depends on your definition of 'foreign'. The OFAC lists contain a number of US entities; individuals, companies and charitable organizations.

Also,..., others have done an excellent job of explaining the compliance principles behind a 'risk-based' approach to sanctions checking.

I will add an operational/tactical perspective. It could be more trouble than it is worth to add exceptions to your systems and procedures.