OFAC Sanctions Compliance – Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?

Compliance > OFAC
Q:  Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?
 
A:   "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]
 
 
 
ADDITIONAL INFORMATION – This Q&A was included in the U.S. Department of the Treasury’s online Resource Center for OFAC - Sanctions Compliance, which may be found here:  https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx
 

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