What is an OFAC check?

Screening of parties against the Treasury Department's Office of Foreign Assets Control sanctions lists, including the Specially Designated Nationals list.

Who must be screened before a commercial loan?

Typically the borrower, guarantors, beneficial owners and key principals, and sometimes other parties to the transaction.

What happens if there is a potential OFAC match?

The lender investigates whether it is a true match. A confirmed match generally means the lender cannot proceed and may have reporting obligations.

OFAC Check, defined · Prodeal glossary

In one sentence

Screening of parties against the Treasury's sanctions lists, a required compliance step before doing business.

The longer version

OFAC screening confirms no party is on U.S. sanctions lists. It is a mandatory compliance check, quick to run but serious in consequence if skipped and later flagged.

OFAC and related screening are part of the KYC and AML diligence every regulated lender must document.

Common questions

What is an OFAC check?: Screening of parties against the Treasury Department's Office of Foreign Assets Control sanctions lists, including the Specially Designated Nationals list.
Who must be screened before a commercial loan?: Typically the borrower, guarantors, beneficial owners and key principals, and sometimes other parties to the transaction.
What happens if there is a potential OFAC match?: The lender investigates whether it is a true match. A confirmed match generally means the lender cannot proceed and may have reporting obligations.

Keep reading

The due diligence checklist, built to be runChecklists as systems, not documents.
The post-closing audit trailWhat examiners ask for and how to have it ready.
The commercial loan closing processThe five stages from term sheet to funded.
Commercial loan softwareWhere this sits in the lending stack.

The longer version

Common questions

Related terms

See this item on a live closing.