OFAC Check on Non-customer?

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Question:

Is it wriiten anywhere for BSA that an OFAC check has to be done on a payee of a monetary instrument who is a non-customer?

Answer:

No, but it is written in OFAC rules that it would be a violation for your bank to issue funds to the payee of a monetary instrument who happens to be on the OFAC list. Whether you conduct screening to mitigate the risk of that type of violation is left up to your individual institution OFAC risk assessment and OFAC compliance program. You'll need to weigh the risks posed by this type of transaction and the costs to conduct the necessary screening and determine where that matches with your level of risk tolerance for OFAC violations.

First published on BankersOnline.com 8/09/10