I am probably making this harder than is it, but what is the rule on OFAC check when a bank is using a correspondence bank? I know an OFAC check is required on the financial beneficiary bank but what about the correspondence bank; is a separate OFAC check required for the correspondence/intermediary bank?. In this scenario, we are the originator/ODFI.

Thanks!

There is no "rule" for any OFAC check. All OFAC does is provide a list of sanctioned entities and enforces penalties on U.S. persons that violate sanctions.

Each institution makes a risk based decision for the frequency and which persons are subject to screening.

We don't do an OFAC check on domestic banks, low risk and it's documented as such in our risk assessment and procedures.

none at all? Do you evaluate the domestic bank at all or it's a blanket rule?

but would it make business since to do an OFAC check on a correspondence bank as well as the final beneficiary bank, especially if it is a domestic bank?

Whether it makes sense depends largely on the cost of performing the additional screenings and the time spent clearing false positives. It really has to be a risk based decision. If you facilitate a transaction for an OFAC sanctioned person or entity, you've broken the law, how much work you want to do to ensure you don't really has to be based on the risk assessment.

Tanders922,

What is your underlying concern here? My impression is that there may be more to this question than you are sharing.

I agree TtoC.