At the time of writing, the OFAC SDN list contains 5,466 entities. This list proscribes the entities that on a statutory basis, companies and individuals can not deal with.
However, it is apparent that regulators and counter-parties alike do not consider this enough. What other entities should companies or individuals not wish to deal with, that are not on the OFAC list?
The below list is just some of those entities that are proscribed by other regulations:
- Foreign Officials – The Foreign and Corrupt Practices act makes “unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business”. The U.S. Patriot Act stipulates that financial companies must make “enhanced scrutiny of [an] account if it is owned by, or is being maintained on behalf of, any senior political figure where there is reasonable suspicion of corruption”. Searching OFAC will not result in a company being aware that the counter-party is a foreign official.
- Individuals subject to adverse media – Should a business conduct business with a counterparty who has been subject to adverse media, but has not been aware of that adverse media, it is clearly negligent of that business as they have can not evidence that they have carried out due diligence against that individual.
- Money-Launderers – Any precedent crime which results in funds being procured (such as prostitution or racketeering) will result in criminals attempting to launder funds. Those individuals convicted of money laundering will not be on the list. Take for instance, Abel Ebifemowei, previously cited in U.S. cables as having been involved in a range of crimes:
Abel Ebifemowei, ex-Governor Alamieyeseigha’s cousin and Bayelsa State transportation official, had masterminded the kidnapping, gathering youths from Ondo, Rivers, Bayelsa, and Delta states and funding their activities. Ebifemowei is also under suspicion for assisting Alamieyeseigha’s escape from UK authorities in December 2005. The SSG said the GON plans to issue a warrant for his arrest on allegations of organizing and financing militia activity in four states.
This however, is simply the beginning of a long range of reason of why simply searching OFAC does not demonstrate a duty of care and why a much wider range of tools are necessary to properly evidence due diligence.