Frequently Asked Questions

65. How frequently is an insurer expected to screen its databases for OFAC compliance?

65 … OFAC may impose civil penalties for sanctions violations based on strict liability, meaning that a person subject to U.S. jurisdiction may be held civilly liable even if such person did not have knowledge that it was engaging in a transaction that was prohibited under sanctions laws and… Read more

102. How can an insurer or reinsurer participate in worldwide insurance markets through global insurance policies if, by definition, coverage extends to potential risks in sanctioned countries?

102 … The best and most reliable approach for issuing policies with global risk coverage without violating U.S. sanctions law is to include a clause ensuring there is no coverage for risks that violate U.S. sanctions law. The exact wording of such clauses may vary depending on the type of policy (e… Read more

103. What if market circumstances of the relevant commercial setting do not permit the use of a U.S. sanctions-specific exclusionary clause?

103 … OFAC recognizes that U.S. insurers and reinsurers often compete in international markets where non-U.S. insurers are willing and able to issue global insurance policies without an exclusion that applies to U.S. sanctions, or where such clauses may be prohibited under local law. In cases where… Read more

44. Is there a dollar limit on which transactions are subject to OFAC regulations?

44 … There is no minimum or maximum amount subject to the regulations. … Is there a dollar limit on which transactions are subject to OFAC regulations? …

45. Does my bank need to check the OFAC list when selling cashier's checks and money orders? In the case of cashier's checks, do I need to check both the purchaser and the payee? As a mortgage lender, do I need to check both the purchaser and the seller's name against the Specially Designated Nationals list? Do I need to check their names against all of OFAC's other sanctions lists?

45 … Every transaction that a U.S. financial institution engages in is subject to OFAC regulations. If a bank knows or has reason to know that a target is party to a transaction, the bank's processing of the transaction would be unlawful. … Does my bank need to check the OFAC list when selling… Read more

46. If a loan meets underwriting standards but is a true "hit" on OFAC's Specially Designated Nationals (SDN) list, what do we use as a denial reason on the adverse action notice?

46 … If you have confirmed with OFAC that you have a "good hit" on the SDN list or one of OFAC's other sanctions lists , there is no reason not to explain that to the customer. The customer can contact OFAC directly for further information. … If a loan meets underwriting standards but is a true "… Read more

47. Through corporate giving programs, many banks contribute toward charities and other non-profits. To what extent does a bank need to review the recipients of these gifts or the principals of the charities?

47 … Donations to charitable institutions must be handled as any other financial transaction. The donating bank or institution should crosscheck the recipient names against OFAC's sanctions lists and assure that the donations are in compliance with OFAC sanctions programs . … Through corporate… Read more

52. Can U.S. financial institutions open correspondent accounts for Iraqi financial institutions, or process funds transfers to and from Iraqi financial institutions?

52 … Yes, U.S. financial institutions are authorized to open correspondent accounts for, and process funds transfer to or on behalf of Iraqi financial institutions. … Can U.S. financial institutions open correspondent accounts for Iraqi financial institutions, or process funds transfers to and from… Read more

95. Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?

95 … "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… Read more

335. Firms operating in the securities industry as custodians and securities intermediaries often face the question of how to accurately identify the beneficial owner of assets within an account or transaction. What can these firms do to protect themselves from the risk of directly or indirectly providing services to—or dealing in property in which there is an ownership or other interest of—parties subject to sanctions?

335 … OFAC encourages firms operating in the securities industry, including securities intermediaries and custodians, to implement measures that mitigate the risk of providing services to, or dealing in property in which there is an ownership or other interest of, parties subject to U.S. sanctions… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence