FA presents cash to the bank and seeks to wire it to his spouse, RA, in Cuba. The OFAC list identifies RA as a specially designated national. Under OFAC
Regulations, what should the bank do?
Click on the arrows to vote for the correct answer
A. B. C. D.A
The Office of Foreign Assets Control (OFAC) is a regulatory agency within the U.S. Department of the Treasury that administers and enforces economic and trade sanctions against targeted foreign countries, individuals, entities, and organizations that pose a threat to U.S. national security or foreign policy objectives.
In the given scenario, FA wants to wire cash to RA, who is identified as a specially designated national on the OFAC list. Specially designated nationals are individuals or entities that are subject to economic sanctions and other restrictive measures because of their involvement in activities that threaten U.S. national security or foreign policy objectives.
Given this situation, the bank must comply with the OFAC regulations, which require financial institutions to block or freeze transactions involving specially designated nationals, entities, or countries. Therefore, option A, which states that the bank should block the transfer, is the correct answer.
Option B, which suggests that the bank should conduct the transfer as requested and take no further action, is incorrect. Financial institutions are required to screen transactions against the OFAC list, and if a match is found, the transaction must be blocked or frozen.
Option C, which proposes that the bank should conduct the transfer as requested and notify OFAC immediately, is also incorrect. OFAC regulations require financial institutions to block or freeze transactions involving specially designated nationals, entities, or countries, and notify OFAC of the transaction block or freeze. Notification of OFAC is not an alternative to blocking the transaction.
Option D, which suggests that the bank should conduct the transfer only if it determines that Cuba is not a blocked country, is also incorrect. OFAC sanctions are not country-specific, but rather target specific individuals, entities, and activities. Even if Cuba is not a blocked country, the bank must still comply with OFAC regulations and block transactions involving specially designated nationals, entities, or activities.