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2047-55 (1990); The International Security and Development Cooperation Act, aa8–9; The Trade Sanctions Reform and Export Enhancement Act of 2000, Title IX, Pub. On November 9, 2009, OFAC issued a final rule entitled "Economic Sanctions Enforcement Guidelines" in order to provide guidance to persons subject to its regulations. Certain programs also require foreign persons in possession of U. OFAC encourages banks to take a risk-based approach to designing and implementing an OFAC compliance program. For example, if a funds transfer comes from offshore and is being routed through a U. bank to an offshore bank, and there is an OFAC-designated party to the transaction, it must be blocked.

Other sanctions are specific to the national security interests of the United States. Unlike the BSA, the laws and OFAC-issued regulations apply not only to U. banks, their domestic branches, agencies, and international banking facilities, but also to their foreign branches, and often overseas offices and subsidiaries.

Before processing transactions that may be covered under a general license, banks should verify that such transactions meet the relevant criteria of the general license.

Applications for a specific license may be submitted either online from the OFAC Web site, or in writing to: Licensing Division, Office of Foreign Assets Control, 1500 Pennsylvania Avenue, NW, Washington, DC 20220.

A blocked account is a segregated interest-bearing account (at a commercially reasonable rate), which holds the customer's property until the target is delisted, the sanctions program is rescinded, or the customer obtains an OFAC license authorizing the release of the property. In some cases, an underlying transaction may be prohibited, but there is no blockable interest in the transaction (i.e., the transaction should not be accepted, but there is no OFAC requirement to block the assets).

The document explains the procedures that OFAC follows in determining the appropriate enforcement response to apparent violations of its regulations. In the case of certain programs, such as those regarding Cuba and North Korea, foreign subsidiaries owned or controlled by U. In general, the regulations that OFAC administers require banks to do the following: U. law requires that assets and accounts of an OFAC-specified country, entity, or individual be blocked when such property is located in the United States, is held by U. individuals or entities, or comes into the possession or control of U. The definition of assets and property is broad and is specifically defined within each sanction program. 108-19; Foreign Narcotics Kingpin Designation Act (Kingpin Act), –1908, ; Burmese Freedom and Democracy Act of 2003, Pub. It is important to note that the OFAC regime specifying prohibitions against certain countries, entities, and individuals is separate and distinct from the provision within the BSA's CIP regulation (.220(a)(4)) that requires banks to compare new accounts against government lists of known or suspected terrorists or terrorist organizations within a reasonable period of time after the account is opened. However, because the transactions would constitute the exportation of services to Sudan, which is prohibited, the U. bank cannot process the transaction and would simply reject the transaction.Currently, OFAC provides guidance on transactions parties on checks.The guidance states if a bank knows or has reason to know that a transaction party on a check is an OFAC target, the bank’s processing of the transaction would expose the bank to liability, especially personally handled transactions in a higher-risk area.

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