OFAC CHECK ON CASHIERS CHECK PARTIES

IS THERE A REQUIREMENT TO CONDUCT OFAC CHECKS ON PARTIES INVOLVED IN THE SALE OF MONETARY INSTRUMENTS?

There is no requirement to OFAC check persons etc on the OFAC/SDN list.

That being said, the examiners will look to your BSA/OFAC risk assessments to see how identified, quantified and mitigated risk related to OFAC and Monetary Instruments (i.e. We only sell to well known Customers who have maintained accounts for 5 years or more – would be a mitigation)

There is no requirement to OFAC check any one. However, you're bank is not permitted to do business with any one on the SDN list. As BC78a posted, your OFAC RA should determine the appropriate procedures to be followed.

Eventhough it isn't required you will have to explain to an examiner why you don't. The reasoning should be described in your OFAC risk assessment. Take in account your volume, customer types, do you sell to non-customers, and your location area (HIFCA & HIDTA).

I have am a local community institution, very low volume, and we do not sell to non-customers but I run all payees against the OFAC list because I am in a HIFCA & HIDTA.

We are a local community institution, very low risk and we do not sell cashiers checks to non-customers either. However, our check writing software automatically scans all parties against the OFAC list. Examiners love it.

Of course, they are so easily entertained.

Of all of the "OFAC checks" banks perform, checking names on customer and bank checks are the most worthless. (Actually, checking bank vendors may be even more ridiculous.) Regardless, the discussion above reflects the correct analysis; i.e. if you do not do it, be prepared to explain why.

At a prior position in a community bank, I was able to show examiners an analysis of our check log over a monthly period reflecting an extremely low rate of check issuance to parties other than bank clients and government entities. The few we had were mostly to local car dealerships and a few title companies and attorneys. They moved on rather quickly after that discussion.

Customer of our bank (not on OFAC list), requests a cashier's check payable to Osama Bin Ladin (sorry for the cliche). Teller runs OFAC search and determines there is a POTENTIAL match. In order to confirm whether or not the payee is the SAME Osama on the list, the teller asks the customer for additional details, DOB, SSN, etc. Customer has NONE of that and has no clue what we are talking about. Since we cannot make a POSITIVE identification that the Osama on the list is the same as the one the cahsier's check is payable to, our choices are to refuse the transaction because he MIGHT be on the OFAC list, or provide the CC as requested.

Even if we accept the transaction and send the customer on his way, there are no funds to block. The customer just walked out the door with a negotiable item upon which we can't even place a hold.

Doing OFAC checks on casher's check payees seem like a no-win situation here. Better to accept the minimal risk and avoid doing the OFAC search in the first place? If BSA is based on risk, this would appear to be a pretty low occurance.

So what am I missing? Is the light at the end of the tunnel just another train???

The risk is, if you actually do remit a check to an entity on the SDN list. It's minimal, but it does exist.

If I have a potential match and I cannot determine that it's a false positive, the transaction is refused.

"Doing OFAC checks on casher's check payees seem like a no-win situation here."

I agree and therefore a bank should address why they choose not to do this in thier risk assessment, as the risk is very low.

I am in a HIFCA & HIDTA and do not run OFAC. It's a very manual process for our bank and the risk is so extremely low for an OFAC match in our area, it doesn't make sense for us.

Examiner's haven't had a problem.

Our cash purchases over $3k are auto run through a software program because the branch manually inputs them for MIL tracking - that's good enough for me.


I don't see how it's any different than a customer writing a non-customer a check. We don't check all the checks that clear the bank ... you have a higher risk of one of those being an OFAC hit, than a customer actually walking in & purchasing a cashier's check face to face. IMHO.