When to Hire an OFAC Compliance Consultant

Staying compliant with OFAC regulations can be tricky for companies. OFAC stands for the Office of Foreign Assets Control, which is an agency of the U.S. Department of the Treasury. They administer and enforce economic and trade sanctions against targeted foreign countries, terrorists, international narcotics traffickers, and more. Failing to comply with OFAC regulations can lead to huge fines or even criminal charges, so it's crucial for companies to have robust compliance programs. But when is it necessary to hire an outside OFAC compliance consultant? Here are some signs it may be time:

You're Expanding Globally

If your company is expanding into new global markets, it's wise to partner with an OFAC consultant. They can help you navigate the complex regulations for each country and avoid missteps. OFAC rules vary depending on the countries you're dealing with, the types of products/services, and more. An expert consultant can identify potential risks and advise you on the appropriate compliance controls.

You're Merging or Acquiring

During mergers and acquisitions, it's essential to conduct thorough OFAC due diligence. You need to evaluate the target company's compliance program, screen their customers/vendors, and assess past issues or red flags. An OFAC advisor can help manage this process and identify any problem areas to address post-merger. Don't underestimate the value of their expertise during deals.

You Had an OFAC Violation

If your company has been hit with an OFAC penalty or is under investigation, bringing in outside help is highly recommended. Consultants can conduct root cause analysis to find where your program broke down. They can also advise on corrective actions, help negotiate settlements with OFAC, and make sure you overhaul compliance to avoid future issues.

Your Program Lacks Resources

Maintaining an effective OFAC compliance program requires substantial resources - staffing, screening systems, audits, training, etc. If your current program lacks sufficient resources to manage these components, consider partnering with a consultant. They can provide personnel, technology, and knowledge to strengthen your operations temporarily or permanently.

You're Expanding Product Lines

Introducing new products or services may expose your business to additional OFAC risks if you don't update compliance protocols accordingly. Consultants can analyze your expansion plans and identify areas that need enhancement like customer screening or transaction monitoring. It's better to get their input upfront rather than missing something.

You Need Program Assessments

It's recommended to have outside experts periodically assess your OFAC compliance program to identify gaps and improvement opportunities. Consultants bring an objective perspective and knowledge of OFAC best practices that internal staff may lack. Their insights can help take your program to the next level.

Leadership Changes Occur

When key compliance leadership changes, it can be prudent to involve external consultants, at least temporarily. They can provide continuity and training to get new staff up to speed quickly. Consultants can also advise new leaders on enhancing the program based on industry trends and developments.

You're Expanding Customer Base

If your business is rapidly expanding its customer portfolio, your OFAC compliance workload scales too. Consultants can supplement in-house teams to handle the increased screening, documentation, auditing, and other processes required to onboard new clients. This ensures standards don't slip during growth periods.

You Need Independent Audits

In addition to internal audits, it's wise for companies to have outside experts conduct periodic independent reviews of their OFAC program. This provides an unbiased evaluation of how well you are identifying and mitigating risk. Consultants can pinpoint areas needing improvement and confirm that you adhere to regulations.

Your Industry Peers Have Issues

When other companies in your industry are targeted for OFAC violations, it's a sign you should scrutinize your own program. Consultants can analyze your operations versus peers and tell you whether your compliance seems up to par. Don't get caught off guard if issues start popping up among competitors.

You're Updating Systems

If you're implementing new IT systems like ERPs that will interface with OFAC screening tools, it's important to get outside help. Consultants can provide requirements gathering, system integration, testing, and go-live support. They can also optimize system workflows for efficiency. Don't underestimate the value of their technical know-how.

You Need Training Programs

Ongoing OFAC training across your company is vital for sustaining compliance. Consultants can develop training programs tailored to different roles like sales, finance, procurement, etc. They can also deliver training through workshops, e-learning modules, newsletters, and more. Don't let employee knowledge of OFAC stagnate.

You Have High-Risk Accounts

If your customer portfolio includes high-risk accounts like foreign government entities or companies in sanctioned countries, take steps to mitigate exposure. Consultants can advise you on enhanced due diligence, transaction monitoring, auditing, and reporting for these accounts. Their expertise can help avoid missteps.

You're Developing Policies

When creating or revising OFAC policies and procedures, it helps to have outside perspective. Consultants can provide advice based on regulations, industry trends, and best practices. They can also help document processes, draft guidelines, create training materials, and implement new protocols.