MSB's and OFAC

Posted By: PrimeTime

MSB's and OFAC - 05/25/16 10:55 AM

In discussion with a peer the issue of OFAC risk as it applies to MSB customers came up and I was hoping for some guidance.

If a check cashing MSB cashes a check payable to an individual listed on OFAC and then deposits that check with their financial institution, who would be "on the hook" for that OFAC violation; Assuming the two separate scenarios 1) that the MSB qualifies for and is registered with FINCEN and 2) does not qualify for and is not registered with FINCEN?

Further, in the same scenarios above, if the financial institution utilizes a correspondent bank for their cash letter, who would the violation fall on at that point?

Would the result be the same for an entity that processes wire transfer services as an agent of an MSB (ex. Convenience store that offers Western Union)?
Posted By: John Burnett

Re: MSB's and OFAC - 05/25/16 12:56 PM

The status of the MSB as registered or unregistered with FinCEN is irrelevant. It has nothing to do with OFAC rules.
Posted By: gcg

Re: MSB's and OFAC - 06/01/16 01:20 PM

I still would like to know who is in violation when a customer cashes a check for someone on the OFAC list and then includes it in a deposit to our bank.
Posted By: John Burnett

Re: MSB's and OFAC - 06/01/16 02:10 PM

The customer, since the customer is the party that transacted business with the OFAC-designee. Your bank has no ability to change that fact.
Posted By: gcg

Re: MSB's and OFAC - 06/01/16 08:54 PM

Thank you!