11:59 AM
Connect Directly

Limited OFAC Resources Put Bankers on Hold

Not enough employees and too many filings makes automated service a necessity for Treasury agency.

Call it poetic justice.

Banks doing business in the United States are required by law to check the names of their customers against lists maintained by the Office of Foreign Assets Control (OFAC), a division of the U.S. Treasury. These lists contain the names of known and suspected terrorists, money launderers and other entities whose activities concern law enforcement.

Complications arise when there's a questionable "hit," such as a customer name that almost but not quite matches a name on the OFAC list. In those cases, banks have the option of calling OFAC for advice. But compliance officers at banks are more likely to reach OFAC's automated hotline than a human operator.

With only 14 employees at OFAC working the phones out of 133 in total, that's unavoidable, said Dennis P. Wood, who heads up OFAC's compliance programs division. "There have been horror stories," he admitted. "We try to get back within hours or the same day."

OFAC faces constraints in its resources in part because of the common practice of "defensive filing" that occurs when banks submit an inordinate number of false positives simply to ensure that no situation arises where a bank did not file something it should have filed. This situation was taken to its extreme immediately following 9/11, related Wood, when one bank filed OFAC reports involving organizations with the term "baseball" in their names - a red flag because the English translation of "al Qaeda" is "The Base."

"We were overwhelmed," said Wood.

Now, OFAC's automated system steps banks' compliance officers through the most pertinent criteria and frequently asked questions involved with filing a report in a way that avoids false positives.

But the unintended result of the complexity of the process is that banks may have become less willing to test the line between what is legally acceptable and what is not, especially in terms of deciding whether to deal with someone that might pose a thorny OFAC question. That's a business decision, noted Wood. "Business decisions are often stricter than the requirements."

Wood spoke at the International Money Laundering Conference (Hollywood, Fla.) on March 3, 2005.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Register for Dark Reading Newsletters
White Papers
Cartoon Contest
Write a Caption, Win a Starbucks Card! Click Here
Latest Comment: Janice, I think I've got a message from the code father!
Current Issue
Security Operations and IT Operations: Finding the Path to Collaboration
A wide gulf has emerged between SOC and NOC teams that's keeping both of them from assuring the confidentiality, integrity, and availability of IT systems. Here's how experts think it should be bridged.
Flash Poll
New Best Practices for Secure App Development
New Best Practices for Secure App Development
The transition from DevOps to SecDevOps is combining with the move toward cloud computing to create new challenges - and new opportunities - for the information security team. Download this report, to learn about the new best practices for secure application development.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
Published: 2017-05-09
NScript in mpengine in Microsoft Malware Protection Engine with Engine Version before 1.1.13704.0, as used in Windows Defender and other products, allows remote attackers to execute arbitrary code or cause a denial of service (type confusion and application crash) via crafted JavaScript code within ...

Published: 2017-05-08
unixsocket.c in lxterminal through 0.3.0 insecurely uses /tmp for a socket file, allowing a local user to cause a denial of service (preventing terminal launch), or possibly have other impact (bypassing terminal access control).

Published: 2017-05-08
A privilege escalation vulnerability in Brocade Fibre Channel SAN products running Brocade Fabric OS (FOS) releases earlier than v7.4.1d and v8.0.1b could allow an authenticated attacker to elevate the privileges of user accounts accessing the system via command line interface. With affected version...

Published: 2017-05-08
Improper checks for unusual or exceptional conditions in Brocade NetIron 05.8.00 and later releases up to and including 06.1.00, when the Management Module is continuously scanned on port 22, may allow attackers to cause a denial of service (crash and reload) of the management module.

Published: 2017-05-08
Nextcloud Server before 11.0.3 is vulnerable to an inadequate escaping leading to a XSS vulnerability in the search module. To be exploitable a user has to write or paste malicious content into the search dialogue.

Dark Reading Radio
Archived Dark Reading Radio
In past years, security researchers have discovered ways to hack cars, medical devices, automated teller machines, and many other targets. Dark Reading Executive Editor Kelly Jackson Higgins hosts researcher Samy Kamkar and Levi Gundert, vice president of threat intelligence at Recorded Future, to discuss some of 2016's most unusual and creative hacks by white hats, and what these new vulnerabilities might mean for the coming year.