OFAC Screening Software
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Financial institutions must comply with OFAC economic and trade sanctions, utilizing screening software to monitor transactions and avoid blocked entities. This software is essential for staying updated on regulations, which includes tracking politically exposed persons to prevent involvement in criminal activities. Non-compliance with OFAC regulations can result in severe consequences for banks.
OFAC Screening Software
- 2. All financial institutions must comply with OFAC economic and trade sanctions. This requires complex algorithms to track all pertinent information. This type of screening is impossible to do by hand, which is where OFAC screening becomes important.
- 3. Screening looks out for a number of entities that institutions should avoid conducting business with in order to remain compliant. This includes blocked nations, people on the blocked persons list, and entities prohibited by defense trade controls. Screening software keeps banks up-to-date on these lists.
- 4. When it comes to blocked persons and entities, all transactions should be monitored. These transactions include deposits, withdrawals, new accounts, wire transfers, and ACH transfers. Even if the person originating a transaction isn’t blocked, the person on the receiving end may be.
- 5. Politically exposed persons (PEP) are a separate issue for banks. These people are either in politics or are related to political figures. While transactions with these parties are not always a problem, PEPs can be more susceptible to bribery, corruption, and fraud.
- 6. Compliance prevents banks from becoming a party to criminal activity. This activity can include money laundering for criminal organizations or terrorist groups. Banks that knowingly engage with blocked persons could become liable for the criminal activity.
- 7. OFAC screening software uses information that comes from the Office of Foreign Assets Control. It also uses information from the Department of the Treasury for its list compilations. Much of OFAC regulations are created in accordance with UN sanctions.
- 8. OFAC screening should be able to accept new database updates while still maintaining access to older lists. It should also be able to provide quick access to information so banks can determine which parties to choose for business deals. The software should be easy to use and understood by the people who use it most.
- 9. The best screening software is able to provide a variety of information with quick response times. Keeping up with all of the regulations is critical, so institutions need a program that works. Failure to comply with OFAC regulations can have serious repercussions for banks.
- 11. All images from www.pixabay.com.