Date to Check OFAC List on New Accounts

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Question:

I know OFAC is not the government list required to be checked under BSA. What was the date that Bank's were required to check the OFAC list on new accounts?

Answer:

There is no such date because there is no such regulatory requirement, as we repeatedly remind bankers who visit BankersOnline. OFAC administers a series of Federal government sanctions programs and issues regulations blocking banks and other U.S. persons from transacting business with targeted individuals, entities and governments. To facilitate compliance with the sanctions programs, OFAC publishes a list of Specially Designated Nationals (SDN list) that can be checked before completing transactions, but does not mandate that the checking be done.

Checking the lists is a risk-management technique that is designed to minimize the risk of completing a transaction in violation of the OFAC regulations. Banks can be cited for having weak controls or policies and procedures if they fail to at least assess the risk of violating the OFAC rules before deciding not to check the SDN list for selected types of transactions. Having and adhering to a policy of checking the lists is a mitigating factor in determining financial penalties if a bank inadvertently violates one of the OFAC regulations.

First published on BankersOnline.com 10/15/12