What is the role of the Originating Depository Financial Institution (ODFI) in OFAC compliance?

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Multiple Choice

What is the role of the Originating Depository Financial Institution (ODFI) in OFAC compliance?

In OFAC compliance for ACH payments, the originating depository financial institution is responsible for screening the party that initiates the transfer. Before transmitting the payment, the ODFI must verify that the originator is not on OFAC’s sanctions list and that the transaction does not involve a blocked party. If the originator is flagged, the ODFI should block or return the payment to prevent sanction violations. The bank does not maintain OFAC lists itself (that’s handled by OFAC) and the primary focus here is verifying the originator’s compliance, not screening beneficiaries or checking every account.

In OFAC compliance for ACH payments, the originating depository financial institution is responsible for screening the party that initiates the transfer. Before transmitting the payment, the ODFI must verify that the originator is not on OFAC’s sanctions list and that the transaction does not involve a blocked party. If the originator is flagged, the ODFI should block or return the payment to prevent sanction violations. The bank does not maintain OFAC lists itself (that’s handled by OFAC) and the primary focus here is verifying the originator’s compliance, not screening beneficiaries or checking every account.

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