The Office of Foreign Assets Control, or OFAC, of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction.
In October of 2001, federal legislation titled “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism,” better known as the USA Patriot Act, was approved by Congress. The law was designed to combat money laundering and terrorist financing, and also expanded the range of industries required to conduct such screenings under existing laws and programs.
In the context of criminal background checks, the Specially Designated Nationals (SDN) list became more important. This is a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.
OFAC’s main purpose is to enforce economic sanctions to interfere with the flow of criminal funds. The SDN and Blocked Persons list is OFAC’s dataset of individuals, such as terrorists and international narcotics traffickers, who are not permitted to do business in the US. The list includes information about the person’s name, city, and country. The SDN dataset does not contain date of birth, so an OFAC screening, terrorist search alone may make it difficult to identify a match with complete certainty. However, it does identify any possible matches that can be further looked into before making a hiring decision.
Because OFAC compliance can be incredibly complicated and fraught with political issues, working with a vendor partner who can perform this screening is one way companies can ensure the safety of a workforce and legal compliance in the background screening process. If your company is in financial services, you should be aware that many of the best practices supplied by the U.S. Department of the Treasury on OFAC relate specifically to banking institutions. How you use, or may be required to use, OFAC screening depends on what industry you’re in. While the Patriot Act is Federal law, also be aware that some states have more restrictive requirements for banks and other types of businesses.
The Office of the Inspector General (OIG) has additional compliance guidelines for the health and human services industry. Under Congressional Mandate, the OIG established a program to exclude individuals and entities that cannot participate in federally funded health care programs. Basis for exclusion includes:
Not all companies are required to perform OFAC screening, but it’s good practice to do so. OFAC screening is a requirement for financial institutions, but it’s in the interests of all employers who care about protecting their good name, their employees and customers, to screen prospective employees against the OFAC list to identify those who may have ties terrorist organizations. Industries especially concerned with export licensure, such as Defense/Aerospace, or industries that employ persons who have access to sensitive proprietary technologies, like Financial Services, should always perform this search. This is an inexpensive, but high value search that employers should take advantage of when screening potential hires.
It is safe to assume that most employers would prefer not to hire someone on the SDN list. However, there are some issues in using it for employment screening and it’s important to understand that an OFAC search consists of more than validating Social Security numbers. For the most part, the list is name-only with multiple aliases per person, and is a mix of individuals and organizations. Dates of birth are usually missing, or multiple possibilities are listed. Address history, if present, only includes city and country. From an employer’s perspective, a more significant problem is that the list consists of a large number of common Arabic names. This opens up the possibility of discriminatory practices unless great care is used in applying the information.
Cisive offers a Global Sanctions search which thoroughly checks over 70 global databases covering financial sanctions, suspected terrorist watch lists and most wanted criminals. Datasets include the OFAC, FBI, ATF, Homeland Security, OFSI, GSA Debarred, OIG, Interpol Most Wanted, UN and EU terrorist Lists and many more. Working with a vendor partner who is an expert in performing comprehensive background screening can help your company ensure the safety of your workforce along with legal compliance.