Frequently Asked Questions About OFAC Sanctions List Searches

OFAC sanction list search (also referred to as OFAC screening, OFAC checking, OFAC search, and OFAC scrubbing) is the process of identifying whether or not any entity or party you are engaged in a financial transaction with can be found on watch lists maintained by the Office of Foreign Assets Control (OFAC), a division of U.S. Department of the Treasury. This helps organizations ensure they do not do business with a sanctioned entity, individual, or business.

OFAC sanctions list searches can also extend to identifying sanctions and embargoes placed on nations and geographic and political jurisdictions, further allowing organizations to be confident they are not engaging in transactions with parties facing trade restrictions.

Yes. For several reasons ranging from supporting terrorism to narcotics, the U.S. Department of Treasury has placed restrictions upon numerous entities. Doing business with any entity on an OFAC watch list is a violation of U.S. export regulations, and punishable with civil and criminal penalties and monetary fines. In 2019, OFAC fines exceeded $1.3 billion.

Making sure you are not doing business with a sanctioned entity—a process that includes screening and OFAC sanctions list searches—is essential to help ensure your organization is complying with international trade regulations, and to help protect it from fines, penalties, and the negative media coverage that often follows.

Yes. Many large transactions are facilitated in U.S. Dollars, and processed through U.S. Banks. These banks may freeze funds from being transferred to sanctioned parties or face penalties themselves. To avoid this possibility, OFAC sanctions list searches are strongly recommended.

Yes. The United States is not the only country that maintains watch lists of denied and restricted parties, and sanctioned entities. Many countries maintain similar lists of their own—for instance, the Government of Canada’s Office of the Superintendent of Financial Institutions (OFSI)—as do international organizations like the United Nations and the World Bank.

Generally speaking, every business transaction, and every party involved in that transaction, should be screened. This includes the end user, as well as all intermediaries. Organizations should also screen business associates, employees, partners, vendors, resellers, visitors, etc. Countries should also be screened to ensure they are not currently facing sanctions or under embargoes. Put simply, it is best practice to screen everyone, all the time.

The specifics of this can vary from organization to organization, and on occasion, even from transaction to transaction. Some organizations may choose to screen potential customers or vendors at first contact. Some screen at every step of a transaction, while others screen right before delivery of an order is scheduled. Many organizations have automated screening solutions that are integrated with their ERP, CRM, and/or other business systems, to screen and re-screen entities on a schedule determined by the organization.

The important thing is that your screening activities help keep your organization in the clear. Exactly how that is achieved is, as mentioned, variable.

Yes, for many reasons. Chief among them is the fact that OFAC sanctioned entities don't have to be foreign nationals or organizations—many U.S. individuals and companies are on OFAC lists. Even if you are only conducting business in the United States, there is a chance you could violate OFAC regulations if you don’t perform OFAC sanctions list searches.

Yes. There are a number of denied party lists of individuals, entities, and countries that, for a variety of reasons, the U.S. Departments of State, Commerce, and others, as well as international governmental agencies, have placed trade restrictions upon. Watch lists against which organizations are expected to screen include:

• Export-related restricted, denied, and blocked persons lists such as the Department of Commerce Denied Persons (BIS), the Department of State Designated Terrorist Organizations, and the Department of State Arms Export Control Act Debarred Parties (DDTC) lists.
• Sanctions programs-related blocked persons lists, including the United Nations Consolidated List.
• For organizations that do work for the U.S. Government, General Services Administration Lists of Parties to help identify those (e.g., suppliers and vendors) excluded from receiving Federal contracts.
• Law enforcement-related wanted persons lists, such as the FBI Ten Most Wanted Fugitives, FBI Most Wanted Terrorists, Department of Homeland Security Investigations Most Wanted, U.S. Immigration and Customs Enforcement and Removal Operations Most Wanted, and the U.S. Secret Service Most Wanted List, to name just a few.
• Politically Exposed Persons and Office of Inspector General Lists.
• International Terrorist, Blocked Person, Wanted, and Entity Lists, such as the European Union Consolidated List, Interpol Recently Wanted, HM Treasury Consolidated List, and additional international lists from other countries, including Australia and Japan.

If an organization conducts business with entities on these watch lists, they are risking an export violation that could result in fines and other penalties. By making sure that they avoid doing business with anyone on a government watch list, companies are helping to protect themselves against said fines, other criminal and civil penalties, denial of export privileges, and negative media coverage.

Descartes Visual Compliance OFAC Sanctions List Search solutions check for individuals and companies that are found on OFAC watch lists, as well as countries facing sanctions or under embargo. Options include:

• Online Screening for ongoing, ad-hoc screening,
• Bulk screening, or scrubbing, that checks all records at once through Batch Screening,
• Daily "dynamic" re-screening against daily changes made to government watch lists, and
• Screening solutions that integrate directly into business systems to help ensure screening takes place as a part of the organization’s existing business workflow.

Descartes Visual Compliance solutions are affordable and modular, giving organizations the option to add solutions they need to get compliant right now, and the ability to add complementary solutions to bolster compliance should needs ever change.

Contact us today to learn more about how your organization can get started today with one or more of our screening solutions can decrease reputational risk, increase productivity, and save staff hours spent on searching for sanctioned parties manually.