Answer:
OFAC screening is a risk-mitigation technique. It is not required by any regulation, but it is considered a reasonable control designed to reduce the risk of completing a prohibited transaction with or for an OFAC-blocked party. Whether recipients of charitable donations should be checked is a risk-based decision your bank's management should make.
A factor to consider in that evaluation is the fact that there are purported charitable organizations that have been blocked by OFAC and/or implicated in terrorism funding efforts. So, at a minimum, your bank may decide to review any new organizations to which it has not previously made donations.
First published on BankersOnline.com 1/10/11
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