Everything You Need to Know About OFAC Searches

In the last few years, the federal government’s regulations on with whom companies can and cannot do business have increased significantly. This surge in regulations aims to create a fraud-free and safer business environment for companies and help them operate efficiently while remaining compliant.

Today, businesses must verify their customers, contacts, suppliers, vendors, and entities against a list of checks set by the government, or else they may invite trouble from the regulatory authorities down the road.

One of the checks of the utmost importance for both the U.S. government and businesses and that must be followed by companies, especially those involved in national and international financial transactions, is OFAC Check.

What is an OFAC Check?

The Office of Foreign Assets Control (OFAC) is a part of the U.S. Treasury Department that administers and manages penalties and sanctions put on targeted foreign countries, terrorists, narcotics traffickers, and individuals engaged in activities concerning the proliferation of weapons of mass destruction and those that threaten the nation’s security and economic well-being. The goal of OFAC is to stop the flow of money to individuals involved in terrorism, narcotics, and/or human trafficking. It does so by mandating American businesses to run an OFAC check on those they are doing business with.

How does OFAC work?

The OFAC has created a Specially Designated Nationals (SDN) list, which it regularly updates. This list is a list of individuals and enterprises owned or controlled by, or acting on behalf of, or for targeted countries. It also includes individuals, entities, and groups designated under programs that are not country-specific.

Why was the SDN list created?

The SDN list was primarily intended for financial institutions, such as credit unions and banks, prohibiting them to do business with anyone on the list. The list gradually became important for insurance companies and many others. As a result, OFAC alerts can often be seen in credit reports and OFAC searches on Salesforce.

Similarly, employers also need to pay attention to who they are hiring, as hiring someone on the list can put them in a legal bind.

How to run an OFAC check?

To perform an OFAC check, businesses need to verify the person’s or company’s name against the SDN list, which is public and easy to access through the U.S. Treasury Department website.

However, there are some limitations to OFAC searches.

First, companies or individuals running OFAC searches are responsible for keeping themselves up to date with the new information posted or added to the list.

Second, the list is only name-only with a multitude of aliases per person and contains a mix of companies and individuals. Dates of birth are missing from the data, or there are multiple possibilities for the same.

Considering these limitations, it can be challenging to run an OFAC background check on individuals and companies with whom you are doing business.

But this is where Credit Checker comes into the picture.

If your company uses Salesforce to run credit checks on businesses and individuals, Credit Checker is a simple add-on available on Salesforce AppExchange that helps you run credit checks and pull credit reports from all the major credit bureaus within seconds. Not only that, but it also helps you run OFAC searches inside Salesforce and gives your accurate information about the individual or company you are searching for. It’s fast, efficient, and easy to use that can make your hectic, often repetitive searches a piece of cake.