Frequently Asked Questions

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?

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 …

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?

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 …

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

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

95. 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… 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?

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. Such… Read more

559. For purposes of OFAC sanctions programs, what do the terms "digital currency," "digital currency wallet," "digital currency address," and "virtual currency" mean?

Digital currency includes sovereign cryptocurrency, virtual currency (non-fiat), and a digital representation of fiat currency. A digital currency wallet is a software application (or other mechanism) that provides a means for holding, storing, and transferring digital currency. A wallet holds the… Read more

560. Are my OFAC compliance obligations the same, regardless of whether a transaction is denominated in digital currency or traditional fiat currency?

Yes, the obligations are the same. U.S. persons (and persons otherwise subject to OFAC jurisdiction) must ensure that they block the property and interests in property of persons named on OFAC’s SDN List or any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or… Read more

561. How will OFAC use its existing authorities to sanction those who use digital currencies for illicit purposes?

The United States’ whole-of-government strategies to combat global threats such as terrorism, transnational organized crime, malicious cyber activity, narcotics trafficking, weapons of mass destruction (WMD) proliferation, and human rights abuses include targeting an array of activities, including… Read more

562. How will OFAC identify digital currency-related information on the SDN List?

OFAC may add digital currency addresses to the SDN List to alert the public of specific digital currency identifiers associated with a blocked person. OFAC’s digital currency address listings are not likely to be exhaustive. Parties who identify digital currency identifiers or wallets that they… Read more

563. What is the structure of a digital currency address on OFAC’s SDN List?

Digital currency addresses listed on the SDN List include their unique alphanumeric identifier (up to 256 characters) and identify the digital currency to which the address corresponds (e.g., Bitcoin (XBT), Ethereum (ETH), Litecoin (LTC), Neo (NEO), Dash (DASH), Ripple (XRP), Iota (MIOTA), Monero (… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence