OFAC SDN list screening

Description

A working OFAC SDN screening program matches every customer, beneficial owner, and counterparty against the Specially Designated Nationals and Blocked Persons list at onboarding, on transaction, and on each list update, and blocks transactions and freezes property when a confirmed match is found. The list itself identifies individuals, entities, vessels, and aircraft whose property is blocked and with whom US persons are generally prohibited from transacting; the 50% Rule extends the prohibition to entities owned 50% or more in aggregate by SDNs, which means beneficial-ownership data is part of the screening input, not an optional augmentation. OFAC publishes updates multiple times per week, and the operational discipline assumes daily list refresh as a baseline. The operational difficulty is in the matching itself. Names on the list often appear in transliterated form, with aliases, partial dates of birth, and sometimes only a country and a role. The screening engine has to handle fuzzy matches against transliterated and partially-specified records without producing a review queue so large the team cannot work it. The standard posture runs graduated fuzzy-match thresholds tied to the data quality of the input, a documented false-positive review process with reviewer notes attached to each disposition, and a blocking procedure that freezes funds and files the OFAC blocking report within the statutory window when a confirmed match is found. The OFAC license file (where a transaction otherwise prohibited is conducted under a specific or general license) sits alongside the screening log as the second half of the audit trail. The failure modes are symmetric. Underscreening exposes the operator to OFAC civil penalties, criminal liability in egregious cases, and a public enforcement announcement that compounds the reputational cost. Overscreening is itself a customer-experience problem that has drawn enforcement attention in fair-banking contexts: a screening configuration that systematically blocks customers from particular national-origin or naming-convention cohorts has been treated as a discrimination signal, regardless of whether any specific block was a true positive. Evidence formats that hold up include the per-customer SDN screening log with disposition notes, the blocked-property reports filed with OFAC, and the OFAC license file showing the authorization basis for any otherwise-prohibited transaction. The country-sanctions rollup screening (DFAT, Canadian Autonomous Sanctions, METI, MAS TFS, SECO) runs in parallel for operators with cross-border exposure, typically through the same aggregator service.

Applicability

Applies when: markets include US.

How predicates are evaluated

Required by (2 regulations)

• US OFAC

  31 CFR Part 501 — SDN List + Sectoral Sanctions Identifications + Foreign Sanctions Evaders + Non-SDN Iranian Sanctions; updated multiple times per week; the 50% Rule extends sanctions to entities owned 50%+ in aggregate by SDNs.

  31 CFR Part 501

  Source →

• Other Sanctions

  Consolidated multilateral screening — the SDN-equivalent on each national framework (DFAT Consolidated List, Canadian Autonomous Sanctions List, METI Notices, MAS TFS lists, SECO Sanctions Search) consumed via aggregator services.

  Consolidated multilateral screening

  Source →

Fulfilled by (3)

• comply-advantage · full · medium effort · $$
• ofac-search · full · low effort · $
• In-house build · high effort

Magist does not accept payment from vendors. Methodology.

Evidence formats

• OFAC SDN screening logs
• blocked-property reports
• OFAC license file