OFAC Reporting Requirements for Auto Dealerships
The Office of Foreign Assets Control (OFAC) is a government agency whose mission is to administer and enforce U.S. economic sanctions programs to accomplish foreign policy and national security goals, primarily as they relate to terrorists and drug traffickers. OFAC requires businesses to screen all customers' names against the Specially Designated Nationals and Blocked Persons List, commonly referred to as the SDN list, prior to any sale.The SDN list contains thousands of names and is frequently updated, making it extremely labor-intensive to screen manually. Nevertheless, auto dealers are required to check their customer's names against the list prior to completing any deal.
OFAC makes the list available to the public in a PDF or text document format through their website, https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx. Users can search the list manually or use the “find” feature in Adobe Acrobat Reader to locate a name. Additionally, many dealer compliance software solutions automatically screen a customer's name against the SDN list.
If your search yields a “hit”, then compare your customer's name to the name on the SDN list. Make sure that your individual person does not have the same name as a corporation, or vice versa. Look at all other identifying information you have for your customer and see if any of it matches the SDN. If you are still unsure whether you have a match, and especially if it appears that you do have a match, then call the OFAC hotline at 1-800-540-6322 to verify the customer's personal information.
Keep a copy of the SDN printout in the deal jacket. Do so even if your search did not indicate a match. Criminal penalties for failure to comply with OFAC can include fines up to $20 million and up to 30 years in prison. Civil penalties can reach $65,000 for every violation.