Avoiding Common “Root Causes” of Failure When Developing an OFAC Compliance Policy
Oberheiden – To develop effective OFAC compliance policies, financial institutions and other businesses must not only address the applicable OFAC sanctions, but also OFAC’s guidance.
One of the most useful guidance documents that OFAC has released is A Framework for OFAC Compliance Commitments (the “Framework”). This document highlights five “essential components” of an effective compliance program according to OFAC. Even more notably, however, the Framework also includes a list of 10 “root causes” that commonly lead to OFAC enforcement actions. Given that the agency has identified these as persistent issues, they should be priority areas for financial institutions and businesses seeking to avoid OFAC scrutiny in 2023.
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