At our Annual Meeting of the Membership in February, a motion was approved that directed the management of the credit union to provide more transparency into the regulations that we're required to comply with, and the steps we take to do so. In our previous issue, we learned about the Bank Secrecy Act (BSA). This quarter, we're going to focus on another federal requirement that helps minimize our risk of losing money to or inadvertently supporting money launderers, drug traffickers, or terrorists.
What is the office of Foreign Assets Control (OFAC)?
The Office of Foreign Asset Control (OFAC) is the part of the US Department of Treasury that administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.1
OFAC essentially helps to protect financial institutions (like SF Fire Credit Union) and individuals against transactions that may risk financial loss or from engaging in terrorist or criminal activity. They compile an ongoing list of Specially Designated Nationals (SDNs) which is a list of individuals and companies owned or controlled by, or acting for or on behalf of targeted countries (not friendly to the United States), as well as groups and entities designated under programs that might not be country-specific.
How does SF Fire credit union comply with the OFAC?
We take many measures to ensure the safety and soundness of SF Fire Credit Union. This starts at the individual member level. We screen every account against the OFAC SDN list on a daily basis. Our member-facing staff has been well-trained to identify transactions or activity that may be deemed prohibited or blocked. An example of activity that would be blocked according to OFAC's current SDN list (last updated June 12th, 2013), would be if a member was trying to wire funds (in any amount) to or from North Korea.2
Our employees, Board of Directors, and Supervisory Committee are required to go through BSA compliance training annually.