Compliance Center: OFAC Issues New Foreign Sanctions Evaders List

The Office of Foreign Asset Controls (OFAC) issued a new list earlier this month to comply with Executive Order 13608, “Prohibiting Certain Transactions with and Suspending Entry into the United States of Foreign Sanctions Evaders with Respect to Iran and Syria.”

Foreign Sanctions Evaders Lists contain individuals and entities that the government says are either evading U.S. sanctions or are helping others avoid sanctions. While most of the third parties that provide OFAC lists and scrubbing services to credit unions should have already updated their systems to include this list and any changes, it is important for credit unions to be aware that this list has been issued.

The executive order doesn’t require financial institutions to block the property of individuals or entities listed, but it does require that individuals or companies not provide or procure technology, goods or services –including financial services — to or from a listed person without authorization from OFAC.

However, if a financial institution receives a wire transfer involving a person/entity listed, it must reject the wire and file a report with OFAC within 10 business days.  If a financial institution discovers that it currently holds an account for a listed person, it must contact OFAC and obtain authorization before the account can be used.

OFAC has published some helpful FAQs that financial institutions can use to determine what they must do if they have a transaction or account that involves a listed individual. It is important to note that each transaction must be approved by OFAC, and a prior transaction’s approval by OFAC doesn’t mean that future transactions should be processed without first obtaining authorization from OFAC.

In addition, if an individual is listed on the Foreign Sanctions Evaders List and also on the SDN list, all future transactions/properties must be blocked.

You can access OFAC’s FAQs here:  http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx#195

Question of the Week

Q: With a Uniform Transfers to Minors Account (sometimes called a “Uniform Gifts to Minors Account”), when the child turns 18 and comes into the credit union to get the money, should we turn the money over to him?

A: No. Although the account is in the child’s name and the interest is reported under the child’s TIN, the person who is listed as the custodian of the account is the actual owner of the money.  If the credit union gives the money from the account to the child, the credit union will have to repay the money to the custodian out of the credit union’s own funds.

Related Links:

RCW 9.114.200

ORS 126.869

Legal Briefs

National Credit Union Administration (NCUA)

NCUA Chairman Debbie Matz delivered a keynote speech at CUNA’s annual Governmental Affairs Conference that highlighted two significant challenges for credit unions: interest rate risk and cyber security.

NCUA Chairman Matz is urging credit unions to educate their members during America Saves Week, which runs Feb. 24 – March 1.  In an announcement made via the NCUA’s website, Matz and the NCUA released several tools that credit unions and their members can use to learn more about America Saves.

The NCUA has released a Board Action Bulletin detailing the February Board Meeting. The Bulletin includes an update on the positive share insurance fund trend and an update to the voluntary liquidation rule.

NCUA Chairman Matz announced that three Listening Sessions for 2014 have been scheduled.

The February issue of the NCUA Report is now available.

Consumer Financial Protection Bureau (CFPB)

The CFPB posted information on its complaints and its process on its blog. The bureau released links to checking a consumer complaint status online and viewing other consumer complaints through the Consumer Complaint Database. To date, the CFPB has received more than 300,000 complaints.

U.S. Treasury (Treasury)

Treasury released an amendment to the Foreign Account Tax Compliance Act (FATCA). Along with the amendments, Treasury also released a FATCA Fact Sheet discussing the key elements of the regulation.

Financial Crimes Enforcement Network (FinCEN)

FinCEN Director Jennifer Shasky Calvery delivered prepared remarks at the Florida International Bankers Association Anti-Money Laundering Conference regarding guidance issued on banking marijuana dispensaries, virtual currency, and customer due diligence. 

FinCEN released final AML regulations for Housing Government Sponsored Entities aimed at fighting mortgage fraud.

Federal Reserve Board (FRB)

The FRB has approved a final rule that strengthens the regulation of large U.S. bank holding companies, identified as companies with total consolidated assets of $50 billion or more. These institutions would be required to enhance risk management and liquidity risk management standards, conduct liquidity stress tests, and have an amount of highly liquid assets set aside.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of Feb. 20. The last update prior to this was Feb. 19.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance, NCUA.