Hi All. Came across a discussion today that seemed like a no brainer but then I was told the opposite answer. Our BSA officer was told at her previous institution they it was "recommended" they check OFAC on their correspondent bank that sends/receives wires on their behalf. This seems quite excessive and pointless since the correspondent bank is a domestic bank that is federally regulated. We send our wires through PCBB and I can't see the purpose of performing and OFAC search on them daily. Has anyone else ever encounter this?

Hello Lexicon, I'm with you, running OFAC on a US financial institution is not something I would consider a high priority, especially daily.

I agree with RockChucker that running OFAC on a US financial institution wouldn't typically be a high priority. That said, I have seen auditors (and examiners) make these types of recommendations. The bottom line to me is that OFAC is risk-based, so whatever you do needs to be justified by risk (i.e. risk assessment) and then outlined in your procedures. If both of these things align with a decision to not review OFAC on your correspondent bank daily, I would agree that it isn't necessary.

Running an OFAC check on a US based, regulated FI isn't really worth it. However, if you're using an automated screening model most of them will screen all parties on a funds transfer automatically.

We do not check domestic banks as it's low risk. We note that in our BSA/OFAC risk assessment and OFAC procedure and the Board is aware of it. Have not had any issues.