Clearing an OFAC Alert You Can Defend

Screening software finds names that look like a sanctioned person. It does not decide whether that person is your customer. That decision, and the record of how you made it, is the core of a dealer's sanctions program.

Why the disposition matters

OFAC sanctions apply to every U.S. person and business, with no size exemption and no dollar threshold, and liability is strict. If you sell metal to a blocked person, buy from one, or release a blocked person's stored metal, it is a violation whether or not you knew. At the same time, most alerts are false positives: common names, partial matches, transliterations. A good process clears the false positives quickly, escalates the hard ones, and leaves a record that shows why each answer is right.

Work the tiers in order

We resolve alerts through a fixed sequence. Each alert stops at the first tier that resolves it.

Tier A: structural exclusion

The list entry cannot be your customer on its face. The entry is a vessel, an aircraft, or an organization, and your customer is an individual. No further comparison is needed.

Tier B: identifier contradiction

Information you already hold contradicts the entry. The most common examples are a different date of birth or a different identity document number. One clear contradiction is enough. You do not need to disprove every field; you need one fact that cannot be true of both people.

Tier B with enhanced due diligence

Your file is too thin to find a contradiction, so you get more information: a government-issued ID from the customer, or a check through a third-party identity verification service. If that new information contradicts the entry, the alert clears.

Tier C: escalation to OFAC

Some list entries carry few identifiers, and ID and verification steps cannot resolve the match. Those cases go to OFAC through its web-based compliance hotline, which is now the only channel.

Confirmed match

If the customer is the listed person, block the property immediately. File the initial blocking report within 10 business days, and include the property in the annual report of blocked property due each September 30 for as long as the block lasts.

A refusal is not a match

Sometimes a customer will not provide ID when asked during a review. You may close the account and return the customer's funds or metal on business grounds. The refusal, by itself, is not evidence that the customer is a sanctioned person, and your record should describe the closure as a business decision, not an OFAC finding.

What the record must show

A disposition memo should name exactly what was compared: which identifier from your file, which field in the list entry, the source of each, and the result. "Not a match" is a conclusion. "Customer's date of birth, from the driver's license provided on March 4, differs from the entry's listed date of birth by 19 years" is evidence.

Keep the memo and the supporting documents for ten years. OFAC extended its recordkeeping requirement from five years to ten, effective March 21, 2025, to match the longer statute of limitations for sanctions violations.

Metal in storage

When a confirmed match holds metal at a depository, the metal stays where it is. Blocking does not transfer title, and the sanctions program regulations generally impose no duty to sell blocked tangible property. What matters is that no one moves it without an OFAC license, and that your agreement with the depository says who freezes, who reports, and who keeps the records.

Make it repeatable

The value of a tiered method is consistency. Two staff members working the same alert should reach the same answer and write it down the same way. That is what we build into RegSmart's OFAC software for precious metals and jewelry dealers, and it is what an independent tester will look for.