Due Diligence and Ongoing Monitoring

On day 1 of the Third Party Bootcamp the Vendor Vetting Sample listed and OFAC check on the Vendor and C level executives. Is an OFAC check required for Vendor management or is it a suggestion? 

It's not a requirement, per se, but it is absolutely a best practice - let's look at it this way - if you are opening up a transactional account - under USA PATRIOT ACT and KYC and more recent FinCEN EDD requirements, you need to know who owns that account - shouldn't you know at least as much about a business relationship?
Original Message:
Sent: 09-19-2019 01:59 PM
From: Tara Cole
Subject: OFAC

On day 1 of the Third Party Bootcamp the Vendor Vetting Sample listed and OFAC check on the Vendor and C level executives. Is an OFAC check required for Vendor management or is it a suggestion? 

OFAC checks are a best practice today.  Our regulatory environment has evolved over the last few years to the point where BSA/AML regulations as well as FinCEN regulations require OFAC background checks for all vendors.  OFAC therefore, has become a part of vendor management.  In my last exam by the Federal Reserve, they audited us to make sure we had an OFAC check for every vendor.  My colleague, Branan Cooper wrote a very good blog post on OFAC checks (see link below).

https://www.venminder.com/blog/run-vendors-through-ofac-check-due-diligence

Has anyone else gone through either and audit or exam recently and had a similar experience?

Original Message:
Sent: 09-19-2019 01:59 PM
From: Tara Cole
Subject: OFAC

On day 1 of the Third Party Bootcamp the Vendor Vetting Sample listed and OFAC check on the Vendor and C level executives. Is an OFAC check required for Vendor management or is it a suggestion?