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March 03, 2008


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I don't remember how I found your blog, but I'm glad I did. It's been very informative.


When I read a comment like the one above, I keep waiting for the addition of "but why are such a(n) [insert expletive here]." Don't you?


You probably don't want to post this comment to your blog, but you might want to take a look at this guidance document from OFAC.

I'll let you draw your own conclusions, but the impact for businesses, financial institutions, and even the U.S. economy may be beyond estimation if OFAC really means (and enforces) what it says in this guidance.

You might want to key in on the third paragraph and part where OFAC says "property of such an entity are blocked regardless of whether the entity itself is listed..." And then think about what hoops a business or financial institution must go through to satisfy themselves that an entity is not affiliated with an entity on the SDN list.

I'm not even sure where to begin assessing the risk to determine when it might be prudent to conduct beneficial ownership due diligence, but here are some things to think about for run-of-the-mill financial transactions:

1. How long will it take to conduct new account opening beneficial ownership due diligence and how much should the institution rely upon the statements of the person opening the account?

2. What happens to wire transfer activity if banks have to conduct beneficial ownership due diligence not only for the originator, but now for the transaction beneficiary as well, for both international and domestic wires? (Transactions that used to take a few minutes or a few hours, may now take days or even weeks to complete. Again, how much reliance can a bank place on statements and assurances from the originator of a transaction?)

3. Similar to wire transfers, how does the guidance impact ACH activity?

4. What about debit card purchases? Blocking online gambling transactions may be a walk in the park compared to this.

Surely, somebody at OFAC has made a mistake by issuing this guidance.

Signed: A Worried Bank Compliance Officer


Lisa, it's best to forget how you made it here. That way, you can always claim that you lacked the requisite intent to deliberately read this snark.

Don, if by "expletive" you mean the terms "Cosmic Muffin" or "Hairy Thunderer," then yes, I do keep waiting for the accolades to commence.

Anon, why wouldn't I post your comment? It's better than 99.9% of the garbage I post on this blog.


You guys are funny. I really do like your blog.

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