What is the difference between OFAC and FinCEN? Both organizations are bureaus of the U.S. Treasury department; however, FinCEN requires searches for suspected criminals and OFAC searches identify known criminals.
The Office of Foreign Assets Control (OFAC) is the government agency that maintains the OFAC list. The OFAC list is a publicly available list and is made up of several subset lists which contain the names of foreign individuals and entities that our government has specified as illegal for U.S. citizens or companies to conduct business with. While OFAC regulations do not require that you perform name searches against the list, regulatory authorities will generally find your BSA program to be deficient if you do not have a program for mitigating the risk of doing business with an entity on the OFAC list. Firms can perform a single name search upon initially engaging a new customer and periodically thereafter against their entire customer base to ensure that an existing client has not been added to the OFAC list. Should a match occur between one of the entities being searched and an entity on the list, OFAC recommends that you call their hotline number to verify that it is a true match.
The Financial Crimes Enforcement Network (FinCEN) issues 314(a) requests, approximately every two weeks. When these notices, which identify individuals and entities suspected of illegal activities, are received, each Broker/Dealer is required to access the secure website at https://www.fincen.gov/314a/, log-in and review the lists of businesses and individuals to determine if there is a relationship with any party identified on the system. To ensure that proper personnel receives these e-mail notifications, a firm must make sure the individual is appropriately reflected on the NASD contact system, that their email address is properly recorded and that the firm’s email server does not filter the notice as spam or junk mail. These requests may not be printed or maintained at the firm and the information listed is to be kept confidential as the individuals and firms listed are only “suspected” of criminal activity.