What is OFAC and what does it do?
Who must comply with OFAC regulations?
How much are the fines for violating these
regulations?
What does one mean by the term "prohibited
transactions"?
Are there exceptions to the prohibitions?
What is an SDN?
What do I do if I have a match to the SDN list?
When should I call OFAC’s compliance “hotline”?
How do I block an account or a funds transfer?
When a transaction is rejected or blocked, I have
ten days to report it. Do I have to do it in writing or can I call OFAC
Compliance and report it that way?
Where can I find the specific details about the
embargoes?
Do all OFAC programs involve blocking transactions?
At what point must an insurer check to determine
whether an applicant for a policy is an SDN?
If a loan meets underwriting standards but is a true
"hit" on the OFAC list, what do we use as a denial reason on the adverse action
notice?
Q: How much does it cost?
^ TOP
A:
The charge for a Certified Patriot Search is
$3.00 per name.
Q: How does it work?
^ TOP
A: If you do not have an account with us
yet you can Sign Up Now directly from our site.
Once your account has been created you then add money to your account by
clicking the "Purchase More" link found at the bottom of your account
info. Clicking "Purchase More" will allow you to securely charge the
amount of your choice
($3.00
minimum) through PayPal where all major credit cards are accepted.
After the transaction has been verified and completed your balance will then be
updated and you can begin to order new searches until you balance runs out at
which point you can then purchase more.
Q: How do I order a new search?
^ TOP
A: Once your account has been setup you
can login using the username and password you entered when signing up.
After logging in you will be brought to our Search page where you can enter the
name you would like to search along with an optional Reference note that you
may want to include on your printed search such as a Title number or File
number.
Q: How do I retrieve a search once I have
placed an order?
^ TOP
A: After placing an order you will
automatically be brought to the search result page where it will list the
searches that you ordered along with a download link next to each where you can
then open or save the search in PDF format.
To view or retrieve searches that were previously
ordered you can go to the "Existing Search" section located on the Search page
and enter any or all of the criteria available and click "Search".
Search results will then be displayed along with a
download link next to each where you can then open or save the search in PDF
format.
NOTE: Adobe Acrobat is required to
view searches.

Q: What is OFAC and what does it do?
^ TOP
A: The Office of Foreign Assets Control
administers and enforces economic sanctions programs primarily against
countries and groups of individuals, such as terrorists and narcotics
traffickers. The sanctions can be either comprehensive or selective, using the
blocking of assets and trade restrictions to accomplish foreign policy and
national security goals.
Q: Who must comply with OFAC regulations?
^ TOP
A: All U.S. persons must comply with
OFAC regulations, including all U.S. citizens and permanent resident aliens
regardless of where they are located, all persons and entities within the
United States, all U.S. incorporated entities and their foreign branches. In
the cases of certain programs, such as those regarding Cuba and North Korea,
all foreign subsidiaries owned or controlled by U.S. companies also must
comply. Certain programs also require foreign persons in possession of U.S.
origin goods to comply.
Q: How much are the fines for violating
these regulations?
^ TOP
A: The fines for violations can be
substantial. Depending on the program, criminal penalties can include fines
ranging from $50,000 to $10,000,000 and imprisonment ranging from 10 to 30
years for willful violations. Depending on the program, civil penalties range
from $11,000 to $1,000,000 for each violation.
Q: What does one mean by the term
"prohibited transactions"?
^ TOP
A: Prohibited transactions are trade or
financial transactions and other dealings in which U.S. persons may not engage
unless authorized by OFAC or expressly exempted by statute. Because each
program is based on different foreign policy and national security goals,
prohibitions may vary between programs.
Q: Are there exceptions to the
prohibitions?
^ TOP
A: Yes. OFAC regulations often provide
general licenses authorizing the performance of certain categories of
transactions. In addition, in some circumstances, U.S. law exempts certain
transactions from embargoes. OFAC also issues specific licenses on a
case-by-case basis under certain limited situations and conditions. Guidance on
how to request a specific license is found at 31 C.F.R. 501.802.
Q: What is an SDN?
^ TOP
A: As part of its enforcement efforts,
OFAC publishes a list of individuals and companies owned or controlled by, or
acting for or on behalf of, targeted countries. It also lists individuals,
groups, and entities, such as terrorists and narcotics traffickers designated
under programs that are not country-specific. Collectively, such individuals
and companies are called "Specially Designated Nationals" or "SDNs." Their
assets are blocked and U.S. persons are generally prohibited from dealing with
them.
Q: What do I do if I have a match to the
SDN list?
^ TOP
A: If you have checked a name manually
or by using software and find a match, you should do a little more research. Is
it an exact name match, or very close? Is your customer located in the same
general area as the SDN? If not, it may be a "false hit." If there are many
similarities, contact OFAC's "hotline" at 1-800-540-6322 for verification. If
your "hit" concerns an in-process wire transfer, you may prefer to e-mail your
question to OFAC. Unless a transaction involves an exact match, it is
recommended that you contact OFAC Compliance before actually blocking assets.
Q: When should I call OFAC’s compliance
“hotline”?
^ TOP
A: Only after you’ve taken the following
“due diligence” steps.
If you are calling about a wire transfer or other
“live” transaction:
1. Is the “hit” or “match” against OFAC’s SDN list or
targeted countries, or is it “hitting” for some other reason (i.e., “Control
List” or “PEP,” “CIA,” “Non-Cooperative Countries and Territories,” “Canadian
Consolidated List (OSFI),” “World Bank Debarred Parties,” “Blocked Officials
File,” or “government official of a designated country”), or can you not tell
what the “hit” is?
-
If it’s hitting against OFAC’s SDN list or targeted
countries, continue to 2 below.
-
If it’s hitting for some other reason, you should
contact the “keeper” of whichever other list the match is hitting against. For
questions about:
-
The Denied Persons List and the Entities List, please
contact the Bureau of Industry and Security at the U.S. Department of Commerce
at 202-482-4811.
-
The FBI’s Most Wanted List or any other FBI-issued
watch list, please contact the Federal Bureau of Investigation (http://www.fbi.gov/contact/fo/fo.htm).
-
The Debarred Parties list, please contact the Office of
Defense Trade Controls at the U.S. Department of State, 202-663-2700.
-
The Bank Secrecy Act and the USA PATRIOT Act, please
contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.
-
If you are unsure whom to contact, please contact your
interdict software provider which told you there was a “hit.”
-
If you can’t tell what the “hit” is, you should contact
your interdict software provider which told you there was a “hit.”
2. Now that you’ve established that the hit is against
OFAC’s SDN list or targeted countries, you must evaluate the quality of the
hit. Compare the name in your transactions with the name on the SDN list. Is
the name in your transaction an individual while the name on the SDN list is a
vessel, organization or company (or vice-versa)?
-
If yes, you do not have a valid match.*
-
If no, please continue to 3 below.
3. How much of the SDN’s name is matching against the
name in your transaction? Is just one of two or more names matching (i.e., just
the last name)?
-
If yes, you do not have a valid match.*
-
If no, please continue to 4 below.
4. Compare the complete SDN entry with all of the
information you have on the matching name in your transaction. An SDN entry
often will have, for example, a full name, address, nationality, passport, tax
ID or cedula number, place of birth, date of birth, former names and aliases.
Are you missing a lot of this information for the name in your transaction?
-
If yes, go back and get more information and then
compare your complete information against the SDN entry.
-
If no, please continue to 5 below.
5. Are there a number of similarities or exact matches?
-
If yes, please call the hotline at 1-800-540-6322.
-
If no, you do not have a valid match.*
If you are calling about an account:
1. Is the “hit” or “match” against OFAC’s SDN list or
targeted countries, or is it “hitting” for some other reason (i.e., “Control
List” or “PEP,” “CIA,” “Non-Cooperative Countries and Territories,” “Canadian
Consolidated List (OSFI),” “World Bank Debarred Parties,” or “government
official of a designated country”), or can you not tell what the “hit” is?
-
If it’s hitting against OFAC’s SDN list or targeted
countries, continue to 2 below.
-
If it’s hitting for some other reason, you should
contact the “keeper” of whichever other list the match is hitting against. For
questions about:
-
The Denied Persons List and the Entities List, please
contact the Bureau of Industry and Security at the U.S. Department of Commerce
at 202-482-4811.
-
The FBI’s Most Wanted List or any other FBI-issued
watch list, please contact the Federal Bureau of Investigation (http://www.fbi.gov/contact/fo/fo.htm).
-
The Debarred Parties list, please contact the Office of
Defense Trade Controls at the U.S. Department of State, 202-663-2700.
-
The Bank Secrecy Act and the USA PATRIOT Act, please
contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.
-
If you are unsure whom to contact, you should contact
your interdict software provider which told you there was a “hit.”
-
If you can’t tell what the “hit” is, you should contact
your interdict software provider which told you there was a “hit.”
2. Now that you’ve established that the hit is against
OFAC’s SDN list or targeted countries, you must evaluate the quality of the
hit. Compare the name of your accountholder with the name on the SDN list. Is
the name of your accountholder an individual while the name on the SDN list is
a vessel, organization or company (or vice-versa)?
-
If yes, you do not have a valid match.*
-
If no, please continue to 3 below.
3. How much of the SDN’s name is matching against the
name of your accountholder? Is just one of two or more names matching (i.e.,
just the last name)?
-
If yes, you do not have a valid match.*
-
If no, please continue to 4 below.
4. Compare the complete SDN entry with all of the
information you have on the matching name of your accountholder. An SDN entry
often will have, for example, a full name, address, nationality, passport, tax
ID or cedula number, place of birth, date of birth, former names and aliases.
Are you missing a lot of this information for the name of your accountholder?
-
If yes, go back and get more information and then
compare your complete information against the SDN entry.
-
If no, please continue to 5 below.
5. Are there a number of similarities or exact matches?
-
If yes, please call the hotline at 1-800-540-6322.
-
If no, you do not have a valid match.*
* If you have reason to know or believe that processing
this transfer or operating this account would violate any of the Regulations,
you must call the hotline and explain this knowledge or belief.
Q: How do I block an account or a funds
transfer?
^ TOP
A: Once it has been determined that
funds need to be blocked, they must be placed into an interest-bearing account
on your books from which only OFAC-authorized debits may be made. The blocking
also must be reported to OFAC Compliance within 10 business days. Some banks
have opted to open separate accounts for each blocked transaction, while others
have opted for omnibus accounts titled, for example, "Blocked Libyan Funds."
Either method is satisfactory, so long as there is an audit trail which will
allow specific funds to be unblocked with interest at any point in the future.
Q: When a transaction is rejected or
blocked, I have ten days to report it. Do I have to do it in writing or can I
call OFAC Compliance and report it that way?
^ TOP
A: At the
moment, OFAC requires that all blocking and reject reports be submitted in
writing. Optional reporting forms are available at this
link. Reports may be mailed in or faxed to OFAC Compliance at
202-622-2426. Blocking and reject reports must contain a copy of the original
transfer instructions. OFAC is currently working with the financial community
on a pilot project to permit the filing of such reports electronically. If you
wish to participate in the pilot project, please contact OFAC Compliance.
^ TOP
Yes. A report of blocked property is to be submitted annually by September 30
to OFAC Compliance, Department of the Treasury, Washington, D.C., 20220. The
standardized form can be accessed by visiting this
link. If you wish to use a different format, please contact OFAC's
Blocked Assets Division at 202-622-2440.
^ TOP
A: With respect to blocked funds
transfers, you will need to submit an
application for the release of blocked funds form which is available on
OFAC's website under "Forms." You should print this form, complete the required
information, attach payment instructions, and mail it to:
Office of Foreign Assets Control
U.S. Department of the Treasury
Treasury Annex
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Attn: Licensing Division
OFAC requests that the application form be submitted in
triplicate. The form must be sent by hard copy - fax copies will not be
accepted. It is extremely important that the underlying transaction be
described in detail and copies of supporting documentation be included in the
package.
Q: Where can I find the specific details
about the embargoes?
^ TOP
A: A summary
description of each particular embargo or sanctions program may be found in the
Sanctions Program and Country Summaries area and in the
Regulations by Industry area on OFAC's website. The text of Legal
documents may be found in the
Legal Documents area of OFAC's website which contains the text of 31
C.F.R. Chapter V and appropriate amendments to that Chapter which have appeared
in the Federal Register.
Q: Do all OFAC programs involve blocking
transactions?
^ TOP
A: No. OFAC regulations are tailored to
further the requirements and purposes of specific Executive Orders or statutes
which provide the basic outline of each program. In some cases, the President
has determined that a comprehensive asset freeze is appropriate, and in others
the President has determined that more limited restrictions (for example,
import bans) are in order. The individual program brochures outline the
restrictions for each program.
Q: At what point must an insurer check to
determine whether an applicant for a policy is an SDN?
^ TOP
A: If you receive an application from an
SDN for a policy, you are under an obligation not to issue the policy. Remember
that when you are insuring someone, you are providing a service to that person.
You are not allowed to provide any services to an SDN. If the SDN sends a
deposit along with the application, you must block the payment.
Q: If a loan meets underwriting standards
but is a true "hit" on the OFAC list, what do we use as a denial reason on the
adverse action notice?
^ TOP
A: If you have
confirmed with OFAC that you have a "good hit," there is no reason not to
explain that to the customer. The customer can contact OFAC directly for
further information.
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