A Patriot Name Search is a Certified Search of published databases by the Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”). The databases queried are; the “Foreign Sanctions Evaders” , the “Specially Designated Nationals and Blocked Persons”, and the comprehensive “Consolidated List”. Certified Search includes this search when ordering a Statewide Judgment Lien Search.
Effective September 24, 2001, Executive Orders 13224, 13268 and 13608 requires anyone conducting a financial transaction to determine if the person(s) with whom they are doing business are listed on the Blocked person list. The USA PATRIOT Act of 2001 requires a check of names that appear on OFAC’s “The Consolidated List” before transacting business.
You can Order a Certified Patriot Act Search. The cost is $2.00 per name.
What is the OFAC?
According to Federal law, every business in the U.S. is responsible for ensuring that they do not conduct business with any individual or entity that is listed on the Office of Foreign Asset Control’s Specially Designated Nationals (SDN) List. To find out if an individual or entity is on the SDN list, a search must be performed. This is often called a Patriot Act Search or an OFAC Search.
OFAC (The Office of Foreign Asset Control) is part of the U.S. Treasury, and is the official body that determines whether or not an entity or individual is allowed to do business in the United States.
What is the SDN List?
The OFAC SDN list includes organizations that are owned by or controlled by targeted countries, like Iran, North Korea, and Cuba. It also includes specially designated individuals and groups that are not country-specific, including drug traffickers and terrorists. According to OFAC, the SDN List includes:
The Specially Designated Nationals and Blocked Persons list (“SDN List”)
The Foreign Sanctions Evaders List
The List of Persons Identified as Blocked Solely Pursuant to E.O. 13599
The Non-SDN Iran Sanctions Act List
The Part 561 list
The Sectoral Sanctions Identifications List
The Non-SDN Palestinian Legislative Council List
Civil and Criminal Penalties for Violating Treasury Dept. Regulations
The Office of Foreign Asset Control has the authority to impose civil penalties for inadvertent or unintentional violations.
Penalties for Inadvertent Violations
Civil penalties for accidently doing business with prohibited individuals and organizations can be significant. Inadvertent violations of the Patriot Act have resulted in civil penalties of up to $11,000 per violation, the seizure of goods and/or funds, and suspension from certain business activities, such as exporting overseas. It’s also important to remember that a single transaction may result in a multitude of violations under different Treasury Department Regulations, which can multiply the final penalty cost many times over.
Penalties for Willful Violations
In cases where violations appear intentional, the Treasury Department may defer to the Justice Department for criminal prosecution which can result in up to 10 years of jail time for officers, directors or agents involved in the violations. Civil penalties for willful violations can total up to $50,000 per violation.
Who Should Perform a Patriot Act Search?
The best way to reduce the risk of facing these penalties is to have a good compliance system that includes regular searches the OFAC SDN list and other terrorist watch lists for clients, potential clients, business partners, investors, etc.
Naturally, employers would not want to hire anyone on the SDN list. Insurance companies are also barred from issuing policies to individuals on the SDN list. Financial institutions and mortgage lenders cannot conduct business or give loans to individuals or organizations on the SDN list. Those conducting business transactions will want to perform a Patriot Act Search as a standard part of performing due diligence.