OFAC screening is now, more than ever before, seen as a critical component of the business of international trade and finance.
Within the process, however, there are a number of glaring opportunities for mistakes, such as forgetfulness, misspellings, assuming someone else has done it, or relying on outdated screening information generated some time ago through an abstract approach.
From working in support of compliance professionals and hearing the kinds of stories that come up from time to time, I know that there are three main reasons for seasoned pros to seek out an OFAC/AML solution that rescreens their company’s contacts every day.
- YOU JUST NEVER KNOW
You might keep immaculate records of every customer, vendor, prospect, account, and so on, and have filing systems in place for every document related to that relationship. You probably keep your screening records organized neatly in this system, and whenever there’s a new transaction you rest assured on that file being intact and complete with screening information.
If your screening information comes from your first encounter with that entity, and that relationship is even two years old, can you really rest assured? What if some of that company’s other relationships have led it onto a dark path? An incident occurring mere days ago may have placed that very entity on a designated party list. If your information isn’t up-to-date, or even current to the moment: Rescreen.
- NOT KNOWING CAN BE COSTLY
So, you’ve checked your files, your paperwork is intact, the screening information from your last restricted party check seems legitimate—when was that? Was it three months ago? In any case, you complete the transaction and carry on as everything seems fine. Suddenly, there’s a phone call from an enforcement agent. They’ve checked your transaction information and one of your parties is on a designated party list! “Didn’t you check?” They ask.
Yes, of course you did. You checked your file on that company and everything was clear. Everything, except for that dusty old screening against OFAC and other designated party lists. Now your company has to absorb the extra cost of having the shipment returned, or the transaction reversed, plus you’ve probably lost face with your company’s upper management. “What happened? Didn’t we do the screening?”
Well, kind of. It’s just that this one particular party was recently involved in a procurement ring coordinating the sale and supply of restricted technologies to Iran. Oops!
- WHEN YOU CAN’T KNOW EVERYTHING, TRUST YOUR SOLUTION
If your OFAC screening solution works with your current business system to screen every company and contact added into it, and then rescreen that information every day, you can finally rest assured. Relax! Throw that outdated filing system in the recycling bin. The speed of technology and cloud-based distribution systems correlates to the speed of changes and additions to government blacklists. They can occur in almost real-time. Outdated solutions simply cannot keep up.
If you’re not rescreening against OFAC lists every day, shouldn’t you be?
