Wednesday, August 27, 2014


The Office of Foreign Assets Control (OFAC) has posted a notice, on the Treasury website, to the effect that it will be limiting use of its  Sanctions List Search Tool,* a free feature that some in the compliance industry choose to employ when checking prospective clients.

The announcement stated:

"In order to ensure that all users of the Sanctions List Search Tool have a similar search
experience, OFAC is now managing the number of searches that a user may conduct
within a short period of time. users exceeding the number of searches allowed will
have their search access temporarily suspended for a few moments. The vast majority of
users should see no change in their search capabilities."

Obviously, some compliance officers are making it a practice to search, repeatedly, for checking multiple customers on the search tool. Good compliance officers should be trained to always access several of the better commercial off-the-shelf databases of high-risk individuals and entities first, and only to refer to OFAC to verify information. it should not be used as the primary search asset. The commercial databases generally have additional information, including aliases and media coverage, which an experienced compliance officer should examine first. Your mission includes the elimination of false positives, and many commercial searches will minimize your erroneous conclusions about subjects that you are checking for. It is submitted that you will needlessly be working on what you later determine to be false positives if you limit yourself to using the OFAC Sanctions List Search Tool as your primary asset.

Additionally, information on high-risk individuals or entities that have not yet made it to the OFAC list comes from the commercial databases, and you may decline a client due to that information, which operates  as a valuable risk management device. Prospective clients not on OFAC this year may still pose a threat. Do you really want to wait until 2016, when they are sanctioned ? You will have brought them in as clients two years prior, if you limit yourself to OFAC-sanctioned parties.

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