How to clear an OFAC false positive, with a rationale template

To clear an OFAC false positive, open the full list entry and compare every detail with what you know about your party: date of birth, nationality, ID numbers and address for a person; location and registration for a company. If only part of the name matches and the other details differ, record why it is not a valid match and proceed. That is the method OFAC sets out in FAQ 5. OFAC will not confirm a false positive for you; it expects a risk-based decision and a record of the steps you took.

Start with which list hit

OFAC's first step is to find out which list produced the alert. Screening tools often include lists kept by other agencies, such as the Commerce Department's Entity List, the FBI's Most Wanted list or the State Department's Debarred Parties list. For those, OFAC says to contact the agency that maintains the list; it does not advise on matches unrelated to its sanctions (OFAC FAQ 5).

The questions OFAC asks

For a hit on an OFAC list, OFAC's guidance asks you to weigh how much of the listed information matches your party (OFAC FAQ 5):

Does only the first name or only the last name match the listed name or aliases?
Does your party have a different date of birth, ID number or nationality?
Is the listed address different from your party's address? Several businesses can be registered at one address, so an address match alone may not be enough.
Is the listed person a well-known figure whose public photographs or details plainly do not match the ID in front of you?

If very few details line up, OFAC says you may not have a valid match and, once you can reasonably determine that, you may proceed. If several details match, such as name and date of birth, treat it as a likely match and follow your procedures for likely matches.

You may need more information to decide. OFAC mentions asking the party for documents such as a birth certificate, driver's license or corporate registration (OFAC FAQ 5).

Weak aliases

Some hits come from aliases OFAC itself marks as weak: broad or generic names likely to produce false hits. OFAC keeps them because they can help confirm a match triggered by other identifiers (OFAC FAQ 122). OFAC says weak aliases may generate a large volume of false hits in automated screening, so a weak-alias hit with no other detail matching deserves the same comparison as any other. OFAC's FAQ 5 notes that screening tools may exclude weak aliases as a risk-based choice.

A rationale template

Copy this into the deal jacket, closing file or vendor record. Fill every line; a blank line is a question an auditor will ask.

Party screened:        <full name>, <identifiers held: DOB / ID / address / registration>
Screened at:           <date and time>
Lists and versions:    SDN published <date>; Consolidated published <date>
Candidate:             <listed name>, list entry <number>, program <code>
Matched on:            <primary name | alias | weak alias>
Compared:
  Name:                <same | partial: which part>
  Date of birth:       <listed> vs <ours>
  Nationality/country: <listed> vs <ours>
  ID / registration:   <listed> vs <ours>
  Address:             <listed> vs <ours>
Documents relied on:   <e.g. driver's license, articles of organization>
Decision:              <not a valid match | likely match, escalated to ...>
Reason:                <one or two sentences a stranger could follow>
Reviewed by:           <name, role>

OFAC asks organisations to keep complete, accurate records of the steps taken to investigate a potential match and the information relied on (OFAC FAQ 5). Records of the underlying transaction are kept for at least 10 years (31 CFR 501.601).

When it is not a false positive

Stop. Check whether a general or specific license authorizes the activity; if not, block or reject as the program requires and report to OFAC within 10 business days (OFAC FAQ 5, 31 CFR 501.603, 31 CFR 501.604).

OFAC alerts on credit reports

A credit bureau may flag a possible OFAC match on a report. OFAC says that if the applicant is not the listed individual, the person checking credit should disregard the alert and need not contact OFAC; if they believe the applicant is the listed person, they should call the OFAC Hotline (OFAC FAQ 70).

See what matched

Run a free OFAC check. Each candidate shows whether it matched on the listed name or an alias, which is the first line of your rationale. This is screening data, not legal advice.