ARE YOU STAYING COMPLIANT WITH THE U.S. PATRIOT ACT?
The Difficulties of OFAC Scanning
Office of Foreign Assets Control, OFAC, has long been associated with the sanctions that the government places on other countries as well as businesses within the country. However, much of their focus has shifted towards terrorism since the events of 9/11 took place. Because of this, lending and financial institutions have been greatly affected.
For example, since one of the ways that money tends to flow through terrorism groups is through monetary instruments, like bank accounts, money orders and wire transfers, regulations require that businesses are cognizant of the customers that are presenting themselves to them.
In order to offer aid with this, OFAC has developed a system to which these businesses can compare their daily transactions. This process, OFAC scanning, is an important process for many businesses. In order to complete this process, businesses must scan all transactions and compare them with the regulations that are available through OFAC.
Businesses must compare payee names on payment transactions to OFAC’s list of Specially Designate Nationals (SDN). If a match is found, due diligence is required to determine whether or not the match is a “false positive” or a valid hit. If it is a valid match, then the transaction must be stopped and reported to OFAC at 1-800-540-6322.
Items to consider:
Is the scanning process done manually or automatically?
Do you have an automated process for obtaining the latest SDN list of names?
How do you handle matches?
Do you have an efficient process for hits on the SDN list?
How do you handle the false-positives?
Do you have to process the same false-positives every scan?
The difficulty in this process is that these types of businesses typically have many transactions on a daily basis. Because of this, it is difficult for the business to have the personnel available to complete the proper procedures and to make sure that no regulations are in violation.
When a business does not comply with an OFAC regulation, it is possible that they will have penalties and fines placed upon them. Because of this, it is important that all businesses practice due diligence. Most often, this process is simpler when the business relies on a software system that will allow them to complete the process with ease.
Prelude's Easy-To-Use PayFlag™ OFAC Scanning Service
PayFlag is a tool that is very beneficial to businesses who require OFAC scanning. It has been designed to allow you to rest assured that you are in compliance and that no payments are falling into the wrong hands. In order to learn more about the tools that will help with your OFAC scanning process, make sure that you contact us today.