Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?
“Property,” as defined in OFAC regulations, includes most products that financial institutions offer to their clients. “Property interest,” as defined by OFAC, includes any interest whatsoever, direct or indirect, present, future or contingent. Given these definitions and as a matter of sound banking practice, it is prudent for financial institutions to screen account beneficiaries upon account opening, while updating account information, when performing periodic screening and, most definitely, upon disbursing funds. Where there is a property interest of a sanctions target under a blocking program, the property must be blocked. Beneficiaries include, but are not limited to, trustees, children, spouses, non-spouses, entities and powers of attorney.
“Property,” as defined in OFAC regulations, includes most products that financial institutions offer to their clients. “Property interest,” as defined by OFAC, includes any interest whatsoever, direct or indirect, present, future or contingent. Given these definitions and as a matter of sound banking practice, it is prudent for financial institutions to screen account beneficiaries upon account opening, while updating account information, when performing periodic screening and, most definitely, upon disbursing funds. Where there is a property interest of a sanctions target under a blocking program, the property must be blocked. Beneficiaries include, but are not limited to, trustees, children, spouses, non-spouses, entities and powers of attorney. [12-04-06] On February 14, 2008, OFAC issued guidance stating that the property and interests in property of an entity are blocked if the entity is owned, directly or indirectly, 50% or more by a person whose property and interests in propert
Related Questions
- My company provides money remittance and account services via the Internet. Does OFAC have any compliance guidance for this type of business?
- Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?
- Who should screen the IAT for OFAC compliance?
