How to Comply With OFAC Regulations

With terrorism and drug trafficking on the rise, it is important for banks and United States citizens as well to comply with the Office of Foreign Assets Control (OFAC) regulations. The OFAC is a division of the U.S. Department of the Treasury. Using sanctions, controlling transactions and the ability to freeze foreign assets, the OFAC targets countries harboring or participating in terrorism or drug trafficking. Read on to learn how to comply with OFAC regulations.

Instructions

Difficulty: Moderately Easy

1. Know the general rules and regulations established by the OFAC. Check the link to the OFAC on the U.S. Department of the Treasury website for a list of all programs relating to OFAC.
2. Follow the guidelines set by the OFAC pertaining to the type of industry you are in. Different guidelines are available for different industries including banking, tourism and insurance. Brochures are available from the OFAC that detail the guidelines for each industry affected by the OFAC regulations.
3. View updates on individuals and companies listed on the OFAC's prohibited list. This is called the Specially Designated Nationals and Blocked Persons (SDN) list and it is updated weekly. This list can be viewed on the OFAC's website.
4. Refer to the OFAC's Country Sanctions and List-based Sanctions. The Country Sanctions list will include countries red-flagged for having terrorism and drug trafficking ties, while the List-based Sanctions include the types of programs available, including anti-terrorism, diamond trading and drug trafficking.
5. Block the transition you are conducting if the company or individual appears on the lists provided by the OFAC or the transaction is originating from any of the countries on the OFAC's prohibited list. Freeze the assets and contact the OFAC within 10 business days. The OFAC's contact information including a compliance hot line phone number can be found at the OFAC Scout website.
6. Develop policies and procedures within your company or personal methods to comply with the OFAC regulations. Implement procedures for maintaining the OFAC's updated lists, opening new accounts, differentiating between blocked and rejected transactions and setting up reporting procedures should the OFAC regulations be violated.

Tips & Warnings

• You can integrate the OFAC regulatory processes into your current application process, or maintain it as a separate process.
• All transactions, including but not limited to deposits, withdrawals, transfers, safety deposit boxes, credit checks and loans are subject to the OFAC regulatory procedures.
• Failure to comply with the OFAC regulations results in fines that can range from $50,000 to $10,000,000 (up to $250,000 per transaction) and imprisonment for 10 to 30 years on a criminal level and fines up to $1,000,000 for each violation on a civil level.