An FAQ on OFAC basics

The mere mention of the Office of Foreign Assets Control (OFAC) can strike fear into the hearts of some credit union compliance professionals. Violations of OFAC sanctions are a strict liability offense – meaning that a violation occurs even if it was unintentional or if the credit union operated in good faith. In addition, there is no way to “cure” an OFAC violation. Given the relatively high stakes involved, it is not surprising that a credit union may want to mitigate its OFAC compliance risk as much as possible.

With that in mind, here are some frequently asked questions relating to OFAC compliance:

Is an OFAC check required? Are any other actions required?

The NAFCU Compliance Team often receives questions asking if a credit union is required to run an OFAC check in certain circumstances. The OFAC regulations and applicable federal laws do not actually require a credit union to run an OFAC check at any point. However, they do require a credit union to avoid engaging in transactions with sanctioned individuals or entities. OFAC requires credit unions to :

 

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