Understanding Financial Sanctions Validation

For U.S.-based companies and their foreign subsidiaries, a federal regulation from the Office of Foreign Assets Control (OFAC) requires that suppliers be validated against a Specially Designated Nationals (SDN) list prior to payment. OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under U.S. jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

PeopleSoft provides you the ability to download the list of SDNs from the OFAC, the European Union, as well as enterprise sources. Once installed, you can manually search the list to validate suppliers. In addition to manual searches, you can enable searches to be performed automatically when processing transactions. If, for example a supplier name or address matches one on the SDN list, PeopleSoft provides a process for administrators to verify that the match is correct and prevent any financial transactions from occurring with that individual or entity or approve the transaction if the match proves to be a false positive.

This section discusses:

• Overview of financial sanctions validation.

• Financial sanctions validation and transaction processing.

• Examples of financial sanctions validations.