The U.S. Department of Treasury requested $1.59 billion for treasury programs in 2021. With such a large budget spend, it’s imperative that financial security is a priority to secure national interests and money. To this end, the Office of Foreign Assets Control (OFAC) has a stringent set of policies to safeguard companies that deal in international trade. OFAC has a list of sanctioned and embargoed nations that organizations can look up, to ensure that they don’t trade with these countries and end up in a financial mess, or worse.
International transactions come with their own set of issues, one among them being OFAC compliance. OFAC Screen and Search is a procedure that companies must abide by, to ensure that individuals and companies they’re transacting with aren’t on the OFAC’s watch list.
A popular money transfer portal, MoneyGram, faced over 359 sanction programs violations even after facing a legal monitor by OFAC for violations in 2012. The case saw MoneyGram settling for a $34,000 payment in light of the hundreds of violations they committed.
Why should legal departments and companies care? Companies like MoneyGram unwittingly operated on the mistaken notion that the organization they were trading with didn’t require the OFAC Screen, which resulted in a series of charges and a hefty settlement. By taking the time and effort to scan for possible “blacklisted” individuals and organizations (on the OFAC Screening), companies can save time and money punishments that result from a failure to comply.
Humans are amazing, but technology that enhances human processes is even more amazing. This couldn’t be more true in compliance programs.
Most companies have a designated compliance team that meticulously goes through databases, emails, and transactions to search for and catch financial infringements and violations at the source. The companies that do not yet have a department for compliance, need to incorporate one – yesterday.
Programs designed exclusively to trawl data, flag suspicious activity, and report it are a boon to compliance departments. The monitoring software that is used should be updated to the latest versions, and be robust and agile in its programming to keep companies in regulatory good books, and away from contention. Non-compliance, when it comes to OFAC Screening, can cost precious dollars, not to mention messy cases, and lawsuits that eat away at resources and resources.
After going through the previous steps, it’s up to the organization to take a call on how to proceed further. When processes regarding OFAC Screening have been carried out, the next step is determining the correct course of action to resolve, close, or move forward with transactions.
Staying OFAC Screen compliant is ideal and easy when all the components are managed in a central location. It is then a simple matter of trawling through available data to flag any suspicious individuals, companies, and activities. This saves companies money, time, resources and effort.