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OFAC Check - One Hit in 12 Months

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Question: 
If we do an OFAC check on our accounts (past 12 months) and there is one account hit, should we send the account name to OFAC? Do we need to find out the transaction of the account?
Answer: 

First you need to find out if it is a true match or a false positive. Just because you have a hit doesn't mean it's a true match. Does the full name match, or just part of the name or address? What about the SSN and or date of birth? Do they match as well? If you've done all these steps and now you are certain you have a true match, now you've got an issue that is going to require some research and reporting (and potentially some penalties).

You will have to determine any transactions that have taken place with this customer since he/she has been on the list. Because all of those transactions were prohibited, you've obviously already violated OFAC. You'll need to block the account to prevent any further transactions. Self reporting can help mitigate the penalties, but you'll need to be prepared to address a lot of questions including what changes you've made to your procedures to prevent similar situations from recurring. At this point, I would highly recommend that you involve legal counsel, who is familiar with the provisions and requirements of OFAC, before making contact with the folks at OFAC.

First published on BankersOnline.com 4/12/10

First published on 04/12/2010

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