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28 April 2006
Annex B of the interim rule describes five areas that a sound compliance programme
Banking institutions should assess and identify which product lines present
the most risk for compliance. The interim rule provides the following examples
of areas that should be included in the risk assessment: retail operations,
loans and other extensions of credit, funds transfers, trust, private and correspondent
banking, international, foreign offices, over-the-counter derivatives, internet
banking, safe deposit, payable through accounts, money services businesses and
merchant credit card processing.
Banking institutions should have internal controls for identifying suspicious accounts and transactions, and reporting to OFAC. These internal controls should include:
Banking institutions should have auditors, either internal or external, consultants
or other qualified independent parties conduct an in-depth, comprehensive test
of their OFAC compliance programme at least once a year, unless the institutions
OFAC risk profile is very low. More frequent testing may be appropriate for
banking institutions with a high OFAC risk profile. Any violations discovered
during testing should be reported to OFAC and the institutions banking
Banking institutions should designate a qualified and knowledgeable individual
or individuals to be responsible for the day-to-day oversight of the OFAC compliance
programme and should designate at least one individual to be responsible for
the oversight of blocked funds.
Banking institutions should provide adequate training to appropriate employees. The scope and frequency of the training should be consistent with the OFAC risk profile and each employees responsibilities.
For further information on this topic please contact Joel D Feinberg or Ming-Hsuan Elders or Connie Friesen at Sidley Austin LLP by telephone (+1 212 839 5300) or by fax (+1 212 839 5599) or by email (email@example.com or firstname.lastname@example.org or email@example.com).
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