OFAC Framework for Compliance: 5 Takeaways

According to a recent CUInsight article, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published “A Framework for OFAC Compliance Commitments” to help organizations, including credit unions, take a risk-based approach to developing a sanctions compliance program.

According to the article, entities like the Wolfsberg Group and the Financial Crimes Enforcement Network (FinCEN) have released similar guidance in the past, but issuing an official sanctions compliance framework is new territory for OFAC. OFAC’s motivation for publishing the framework is unclear, but it could be the seemingly record-setting pace for enforcement cases in 2019. OFAC has levied more than $1.2 billion in civil money penalties against businesses so far this year.

The article emphasizes that It’s important to remember that a one-size-fits-all sanctions compliance program doesn’t exist. Each program will vary depending on several factors, including your credit union’s size, geographic location and members. However, the OFAC framework recommends that every sanctions program should focus on these five essential components of compliance:

  1. Management Commitment
  2. Risk Assessment
  3. Internal Controls
  4. Testing and Auditing
  5. Training

So, how should your credit union incorporate ideas from the framework? Click here to read CUInsight’s details of the following takeaways, based on the five compliance components above, that you can implement right away to improve your credit union’s OFAC compliance efforts.

  1. Choose Your Credit Union’s OFAC Compliance Officer
  2. Risk Assessment: Don’t Re-invent the Wheel
  3. Internal Controls: Mind Compliance Gaps with Tech
  4. Testing and Auditing: Always Be Checking
  5. Training: Can You Be More Specific?

Source: CUInsight

Searching for Compliance and Audit Solutions, click here to find out more or contact Nicola Foggie at nfoggie@njcul.org.