When the political and business calamity of the world economies is continuously evolving, it is important for businesses to find that one constant that protects their business and grounds them with compliance, making them immune to risk. Call it fear or discipline, compliance is the only regulatory practice that shields businesses from risk.
And when you want to trade and engage with companies around the world, compliance plays a critical role in classifying the risk quotient.
Let’s say that you’ve recently founded an e-commerce business and want to work with international vendors to procure products for your business. How do you verify if these vendors are credible? How do you make sure that they are not terrorists or money launderers in the garb of innocent vendors from a foreign country?
The risk of money laundering and terrorism financing in seemingly innocent business conduct is very high. This is why federal agencies are mandating AML compliance protocols, KYC verification, and due diligence
While there are many ways to verify, only the identity verification ecosystem guarantees the accuracy of the identity records. Identity checks, such as SDN or Specially Designated Nationals check, allow businesses to uncover the real identities of the profiles in real-time per the federal-authorized data lists.
Let’s take a look at the mechanism of Specially Designated Nationals check and how businesses can leverage it.
According to OFAC, Specially Designated Nationals are persons from targeted foreign countries who have been sanctioned by the OFAC for engaging in narcotics and drug trafficking, money laundering, export of mass destruction material, prohibited arm exports, and other restricted activities. These sanctioned profiles (be it persons or groups of entities) and their assets in the U.S. are blocked by the OFAC.
The Specially Designated Nationals List is a sanctions program that categorizes the list of individuals who have been blocked by the OFAC as a part of its enforcement efforts. Persons and entities within the U.S. are strictly prohibited from engaging with sanctioned profiles.
The SDN List consists of the identities of the sanctioned profiles, enabling businesses to search the SDN list and verify if the identities are listed in the data list. Businesses can easily enter the identities of a profile in the SDN search and verify if the person or the entity is listed in the SDN list.
If the profile’s identities match the identities listed in the SDN list, it means that the Treasury Department has blocked or sanctioned the profile. The OFAC can block an entity or a nation for any reason cited by the Treasury Department as “non-compliant”.
For example, the U.S. foreign economic policy excludes certain countries from trading (example: North Korea or more recently, Russia), then persons and entities within the U.S. are forbidden to engage in commercial conduct with entities and persons from North Korea and Russia.
The SDN list is administered by the Office Of Foreign Asset Control (OFAC) and under the supervision of the U.S. Treasury Department. If a profile ends up in the SDN or Blocked Persons Lists, then such a profile is strictly classified as “off-limits” for regular trade and commercial conduct.
The OFAC updates the SDN list regularly. However, there is no schedule for timely updates. As and when the investigations are concluded by the OFAC compliance teams, the identities are recorded, verified, and published for public records.
It’s safe to say that the SDN lists are highly reliable.
Note: If you’re trying to access these lists from third parties, ensure that the data lists are recent and not historic.
And if you want to skip the process of verifying the credibility of the list, get Compliancely for your business.
Compliancely – a federal authorized identity verification infrastructure is designed to help enterprise industries verify millions of profiles within seconds. You can screen 100,000+ profiles in 30 seconds or less.
Compliancely is directly connected with the source (OFAC), so this means your identity inquiries are met with the latest and accurate records, leaving no room for historic or outdated records.
Further, our dynamic identity validation infrastructure re-screens your data as and when the source data lists are updated, keeping your records up to date.
Leverage API solutions to automate your OFAC screening process and verify millions of profiles faster.