Understanding OFAC: A Best Practices Compliance Guide for All Businesses

Over the last decade, the Office of Foreign Assets Control (OFAC) has imposed $4.3 billion in civil money penalties. But did you know that businesses other than banks received 81% of these fines last year?

Yes, OFAC violations are costing U.S. businesses hard-earned cash. Since the attacks of Sept. 11, 2001, OFAC’s role in national security has increased immensely. The passage of the USA PATRIOT Act brought with it a broader definition of the term “financial institution” in order to highlight industries that, by their very nature, are at a heightened risk for money laundering and OFAC violations. Those industries are defined by OFAC as “All Other Businesses.”

OFAC Fines are Costing “All Other Businesses”

From 2006 to 2017, nearly 30% of all fines levied against OFAC’s “All Other Businesses” category ranged from $100,000 to $499,999. For many companies, a penalty that hefty could be enough to put them out of business. Even if not, an OFAC violation could cause irreparable reputational harm that affects profitability for years to come. Here are just a few of the maximum penalties OFAC can levy against businesses:

• Up to $20 million in criminal penalties and 30 years in prison for willful violations of some programs
• Up to $1.4 million in civil penalties for each violation of the Foreign Narcotics Kingpin Designation Act
• Up to $85,236 for each violation of the Trading with the Enemy Act

With the stakes so high, companies across all types of industries must understand the importance of OFAC compliance and take proactive steps to avoid a compliance pitfall.

Protect Your Business with Sanctions Screening

The crux of your OFAC compliance program is its denied party screening process. Sanctions lists are updated every time OFAC identifies a new individual or entity to be added or removed from that list, which can occur daily. OFAC’s various regulations determine your company’s risk profile and how often you’ll need to cross-check that list: with every transaction, with every new customer, or your entire customer database at periodic intervals.

Understanding OFAC and Sanctions Screening

Comprehending OFAC’s role in your industry is the key to a successful sanctions screening program. Download CSI’s white paper, Understanding OFAC: A Best Practices Compliance Guide for All Businesses, to learn how you can enhance your compliance program and mitigate potential risks. In the paper, CSI’s regulatory experts offer the intel you need to improve your sanctions screening program, including:

• Detailed analyses and data trends of OFAC fines by type and industry from 2006 to 2017
• OFAC implications for several industries, including insurance, MSBs, nonprofits and others
• Five critical best practices for enhancing your company’s sanctions screening program
• Steps to handle positive screening matches

CSI’s white paper provides insight on overcoming your toughest compliance challenges and enhancing your sanctions screening program. OFAC compliance is complicated, but the cost of non-compliance is far too steep to risk.

Understand OFAC by downloading the white paper now.