How should a company effectively screen against OFAC sanctions lists?

Hypothetical:  

A US company is entering into an agreement to sell consulting services to a company in Russia.  The US company’s compliance team runs the name of the Russian customer through its screening software program.  What should the company do next?

Key Considerations:

  • If there is a hit against an OFAC sanctions list, it is important to understand what list and under what program the individual or entity is listed.  For example, a hit against the Sectoral Sanctions Identification List does not mean that activity with the listed person is prohibited, but there may be restrictions on credit and payment terms offered to the Russian company.  Any business activity with an SDN, on the other hand, would be prohibited.
  • Not all blocked persons will appear on the SDN List.  Is the company in question owned 50% or more by a listed individual or entity? 
  • Companies should have policies and procedures in place to screen counterparties and evaluate the results of screening.  Required frequency of screening will vary by industry and business type.
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