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Government Watch List Compliance FAQ


Q.  What are government watch lists?

A.  The Treasury Department, State Department and Commerce Department each maintain lists of companies and people that all U.S. citizens and companies are forbidden to do business with.

The watch lists are frequently updated and contain thousands of names, hundreds of which are located in the United States.

Doing business with entities on the watch lists can result in extremely large fines and other penalties, including loss of export privileges or prison.

Q.  How many watch lists are there?

A.  Although there are watch lists that are international in orientation (e.g., created by the United Nations or Interpol), the watch lists that are most important to American companies and individuals are the lists from the Treasury, Commerce and State Departments.

Each of these Federal agencies has multiple lists, often stored in different formats.  For example, the Commerce Department has a Denied Persons List, an Unverified List, and an Entity List.

The most important lists for U.S. businesses are the OFAC list from the Treasury Department, and the BIS Denied Persons List (DPL) from the Commerce Department.  Verifilter tracks these two plus 11 other important lists.

Treasury Dept website:   OFAC Frequently Asked Questions

Commerce Department website:   How To Avoid Dealing With Denied Persons

Q.  What kind of people are on the watch lists?

A.  The latest lists contain over 8,000 terrorists, money launderers, drug kingpins, and violators of weapons proliferation sanctions programs, among others.  The Federal government often uses the watch lists to express official displeasure with other countries - they recently added Iranian Republican Guards and government officials from Myanmar (Burma).

Q.  How much can fines for compliance violations be?

A.  Fines reaching millions of dollars may be rare, but are allowed by the government.

As an example, in August of 2007, the government announced that Travelocity.com had paid a settlement of $182,750 for a sanction violation. 

A number of other companies have been fined over $200,000 in 2007 alone.

Treasury Dept website:   Fines For OFAC Violations

Q.  Does this apply only to exporters?

A.  No - government watch lists like OFAC (published by the Treasury Department) apply to all American individuals and organizations.   Also, government watch lists collected in August 2007 contained over 235 names with addresses in the United States.

Additionally, the PATRIOT Act requires financial institutions and the real estate industry to implement anti-money laundering (AML) programs.  The OFAC watch list is used in conjunction with this requirement.

Treasury Dept website:   Who Must Comply With OFAC

Q.  How come I haven't heard of this before?

A.  Government sanctions have existed for many years, but since the terrorist attacks of September 11, 2001 the Federal government has dramatically increased its use of watch lists.  The government considers watch lists like OFAC to be a valuable weapon against terrorist and criminal organizations.

Q.  How can I ensure that my business stays in compliance?

A.  Verifilter continually monitors the relevant government watch lists, collecting them into a single, easy-to-search master list.  Subscribe to our service and you'll get instant access to our search facilities, including web-based checking and easy integration into your own web site.

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