Compliance Blog

OFAC Sanctions Compliance Program Best Practices; Webinar Flash Sale!

Written by Shari R. Pogach, NAFCU Regulatory Paralegal

In a speech made at the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference earlier this month, Treasury’s Under Secretary Sigal Mandelker discussed the Office of Foreign Assets Control’s (OFAC) compliance commitments.  OFAC consistently advises financial institutions to use a risk-based approach to sanctions compliance.  While recognizing that U.S. economic sanctions can apply to all types of industries and businesses which doesn’t easily allow for a “one-size-fits-all” sanctions compliance program that can be universally adopted, Mandelker indicated the belief that there are commonalities to a good program.  OFAC has seen what types of best practices that lead to strong and effective compliance programs as well as where entities have fallen short.

Mandelker stated OFAC will outline what makes an effective sanctions compliance program to assist the compliance community in strengthening defenses against sanctions violations.  He highlighted a few of the components of an effective program:

  • Ensure senior management’s commitment to compliance;
  • Conduct frequent risk assessments to identify and mitigate sanctions-specific risks within an institution and its products, services and member customers;
  • Develop and use internal controls, including policies and procedures, to identify, stop, report and maintain records pertaining to activity prohibited by OFAC’s regulations;
  • Test and audit on the specific elements of a sanctions compliance program and across the institution, to identify and correct weaknesses and deficiencies; and 
  • Ensure all relevant personnel, particularly those in high-risk areas or business units, are given tailored training on OFAC obligations and authorities and the institution’s compliance program.

Committing to these compliance components will be an “essential element” in any future settlement agreements between OFAC and sanctions violators.  It is recognized that under a risk-based approach the implementation of these compliance commitments will vary by institution but it is believed they will also ensure awareness of OFAC obligations and the dedication of sufficient time and resources to OFAC compliance.  Mandelker also pointed out such resources have to go far beyond the mere screening of the Specially Designated Nationals and Blocked Persons List (SDN) list.

A compliance officer’s work is never done!  Here are some additional OFAC resources:

OFAC’s Frequently Asked Questions (FAQ) Index

Basic Information on OFAC and Sanctions (for simple in-page searching using your browser's find (CTRL-F) function)

Contact OFAC

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About the Author

Shari Pogach, NCCO, NCBSO, Regulatory Paralegal, NAFCU

 Shari Pogach, NCCO, NCBSO, Regulatory Paralegal

Shari R. Pogach, NCCONCBSO, has served as Regulatory Paralegal for NAFCU's Regulatory Compliance and Regulatory Affairs divisions since 2007.

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