December 14, 2006

OFAC Compliance, the Easy Way

treas_logo.gifOccasionally, I find a simple solution to a complex problem that works better than expected. Office of Foreign Assets Control (OFAC) compliance can be difficult. OFAC is the treasury department responsible for, among other things, enforcing the PATRIOT ACT and Terrorism Sanction Regulations regarding blocking financial transactions with suspected terrorists. Basically, OFAC requires you to compare your client list regularly to the published terrorist watch lists. If you find a match, you are required to stop doing business, freeze the money, and contact the Feds.

The hard part of OFAC compliance is matching your clients to the watch list. OFAC publishes a list on a regular basis, but the list is not exactly user friendly. Complicating matters is the fact that the list contains lots of Mohammeds, Usamas, and John Smiths. Most names on the list also have dozens of aliases. Obviously, not everyone named Mohammed doing business with you is a terrorist, so how do you distinguish the good from the bad?

Enter Bridger Insight from ChoicePoint. For about $6K per year, Bridger provides a simple software solution that lets you track your customers against the OFAC list, the Dept of Homeland Security Terrorist Watch List, the FBI Most Wanted List, and numerous international lists from the UK, the UN and Interpol. Bridger matches your customers based upon name, company name, address, phone number, social security #, driver’s license #, passport #, and account #s. The power of the Bridger match is that it creates a ranked score. You can filter your results down, based on a degree of sensitivity to reduce false-positives.

For example, if the list matches your customer named Paddy O’Leary to a Paddy O’Leary in Dublin, Ireland, but your customer lives in Dublin, California, the match might score an 85% probability. If you have set your filter to 90% probability, Bridger would filter the match from you. Bridger also allows you to flag false-positives that you have verified as false to an exception list. That way, you won’t be bothered with the same alert the next time you run your check.

Perhaps the best part of Bridger is that you can set it up to run in a mostly automated state. Each of the different sources of watch lists updates at different frequencies. Bridger will check on a daily, or even hourly basis, for updates and install them automatically. You can also map Bridger to your customer list data source, and then schedule it to run checks on whatever frequency you want. All that is left to you is to periodically review the results and take action if you think you’ve found a match.

OFAC applies to “All U.S. persons and entities (companies, non-profit groups, government agencies, etc.) wherever located,” so you can not simply ignore this compliance issue. For smaller companies that don’t deal much with foreign customers, the risk of non-compliance is fairly small. For larger companies, especially financial firms, OFAC compliance is not optional. If you do not already have a solution in place, Bridger may be the solution for you.

-Bill

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4 Comments »

  1. Bradley Allen said,

    December 14, 2006 @ 5:17 pm

    Bill,

    Try looking at http://www.attustech.com. They have a stronger name mathing algorithm, a more user friendly interface all at a cheaper price.

  2. Bill said,

    December 23, 2006 @ 11:21 am

    Love Bradley Allen (Nice name) pimping his stuff on your article. Do you get those a lot?

    — Bill :~>

  3. Gabe Anguiano said,

    January 25, 2009 @ 11:08 pm

    Bill,

    Identacheck LLC ( http://www.identacheck.com ) is another alternative. They have a matching algorithm that takes into account name, location and other forms of identification and the scoring mechanism for the results is second to none. They are also considerably cheaper too.

    Gabe

  4. James said,

    April 16, 2009 @ 6:56 pm

    Hi Bill,

    try SimpleOFAC OFAC Suite, Consists of 3 components, List Management, Filter Management and Alert Management.
    Test Driver:
    http://www.simpleofac.com/cp102/gwt/com.simpleofac.gwt.Main/index.html

    use admin as usre name and password to login

    Very user friendly interface.
    Jim

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