Financial Institution Due Diligence Crucial in Dominican Republic Amid Heightened Sanctions Risks

Importance of Thorough Due Diligence

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has emphasized the importance of conducting thorough due diligence when dealing with financial institutions in the Dominican Republic to avoid running afoul of sanctions regulations.

• The growing complexity of OFAC’s Specially Designated Nationals and Blocked Persons list (SDN List)
• Other sanctions lists administered by the agency, including:
  • Foreign Sanctions Evaders List
  • Non-SDN Palestinian Legislative Council List

Risks of Relying Solely on Sanctions List Search

According to OFAC, its Sanctions List Search tool uses approximate string matching to identify potential matches between word or character strings entered into the system and names or name components on the SDN List and other sanctions lists. However:

• The tool does not provide recommendations for specific confidence ratings
• Relying solely on this tool may expose financial institutions to criminal or civil liability

Essential Due Diligence Processes

Financial institutions should develop robust due diligence processes that go beyond the capabilities of the Sanctions List Search tool, including:

• Conducting thorough research and analysis
• Verifying information through multiple sources
• Establishing clear policies and procedures for screening and due diligence
• Training staff on sanctions regulations and due diligence best practices

Prioritizing Thorough Due Diligence in Dominican Republic

In light of the increasingly complex landscape of sanctions regulations in the Dominican Republic, financial institutions should prioritize thorough due diligence and remain vigilant in their screening processes to avoid running afoul of OFAC’s regulations.