Is Your OFAC Compliance Program Out of Control? Top 5 Ways to Know

Your OFAC Compliance Program is your company’s first, last, and only line of defense against the risk of international trade violations and illegal transactions with sanctioned or designated parties.

But how healthy is your existing program, really? Here are a few ways to know.

  1. Your export compliance people have 25 different browser windows open at once. If your company is doing its export compliance tasks manually, you’re probably spending a lot of time tabbing back and forth between your customer database and the U.S. and International Sanctioned Party Lists. It’s not just time consuming and inefficient, it’s also confusing and inaccurate, multiplying rather than reducing the possibility for committing an OFAC violation.
  2. Your spreadsheets are ridiculous. With potentially thousands of different products, customers, intermediaries and suppliers – not to mention any number of third-party brokers and other trade chain partners – your records are going to be hard even to search through effectively, let alone cross-reference with any accuracy. If your compliance team are trolling through hours of transactions, copy-pasting into screening web forms, losing their place, starting again, and cursing the government for making it so difficult for American companies to prevent their goods from falling into the hands of terrorist groups and other denied parties and embargoed entities, you’ve got a problem.
  3. Everyone’s complaining. Part of the job of every company is to stop OFAC violations. This is, of course, especially true for those employees who work in compliance or who are directly involved with customers, intermediaries, suppliers, logistics, and products. When there are complaints about how complicated it is to do things right, how many steps are involved, how information is too hard to find and work with, or how the government’s own tools are all but useless, you can be certain that things aren’t being done correctly – and might not be getting done at all. Frustration with the process leads inevitably to lapses, and lapses lead to violations.
  4. Roles and responsibilities are unclear. Someone at your company has to be in charge of compliance, and for any company with more than just a few people or only a handful of products, the responsibility for screening and compliance is necessarily going to be distributed. If you’re not one hundred percent certain that everything is getting done, if you’re chasing people down and looking over shoulders to ensure that your company isn’t leaving itself open to violations, failing to detect designated parties, or not recording every transaction and screening, what you can know is that some things are being missed. No one can be everywhere at once. If your system requires that someone be constantly on high alert, something needs to change before it’s too late.
  5. You’re afraid of getting caught. Thoughts of the repercussions for non-compliance is what keeps compliance professionals up at night. Only scrupulous adherence to all the relevant regulations can stop your company from exposing itself to the consequences of not living up to the U.S. government’s restrictions and requirements. The penalties for allowing illegal financial transactions or exports to occur can be devastating: monetary fines, suspended or revoked licenses, even criminal prosecution and imprisonment. If you’re worried about these things, that’s not a good sign – it means you’re probably not doing what you need to do to be confident that your company is staying on the right side of the law. Do any of these sound familiar? If they do, it might be the time for a serious review of your Export Compliance Program.