OFAC Issues New FAQs on "Weak" Aliases on SDN List

4 FAQs on Screening Expectations, Penalties, Definition/Methods, Occurrence

OFAC has added answers to the following four new questions on its FAQ list:

• Am I required to screen for weak aliases (AKAs)?
• Will I be penalized for processing an unauthorized transaction involving a weak alias (AKA)?
• What are weak aliases (AKAs)?
• Where can I find weak aliases (AKAs)?

Screening for Weak AKAs Not Required, but is Ancillary Tool

OFAC states that its regulations do not explicitly require any specific screening regime. Financial institutions and others must make screening choices based on their circumstances and compliance approach. As a general matter, though, OFAC does not expect that persons will screen for weak AKAs, but expects that such AKAs may be used to help determine whether a “hit” arising from other information is accurate.

No Civil Penalty if Weak AKA Only Referenced, and 2 Other Requirements Met

OFAC states that a person who processes an unauthorized transaction involving an SDN has violated U.S. law and may be subject to an enforcement action. Generally speaking, however, OFAC will not issue a civil penalty against an individual or entity for processing such a transaction if the following three conditions are met:

(i) the only sanctions reference in the transaction is a weak AKA,

(ii) the person involved in the processing had no other reason to know that the transaction involved an SDN or was otherwise in violation of U.S. law, and

(iii) the person maintains a rigorous risk-based compliance program.

New Procedures to be Used on All New SDN List Aliases

OFAC defines a “weak AKA” as a term for a relatively broad or generic alias that may generate a large volume of false hits. Weak AKAs include nicknames, noms-de-guerre, and unusually common acronyms. OFAC includes these AKAs because, based on information available to it, the sanctions targets refer to themselves, or are referred to, by these names. As a result, these AKAs may be useful for identification purposes, particularly in confirming a possible “hit” or “match” triggered by other identifier information.

Realizing, however, the large number of false hits that these names may generate, OFAC qualitatively distinguishes them from other AKAs by designating them as weak. OFAC has instituted procedures that attempt to make this qualitative review of aliases as objective as possible. Before issuing this updated guidance, OFAC conducted a review of all aliases on the SDN list. Each SDN alias was run through a computer program that evaluated the potential of an alias to produce false positives in an automated screening environment. Names were evaluated using the following criteria:

1. Character length (shorter strings were assumed to be less effective in a screening environment than longer strings);
2. The presence of numbers in an alias (digits 0-9);
3. The presence of common words that are generally considered to constitute a nickname (example: Ahmed the Tall);
4. References in the alias to geographic locations (example: Ahmed the Sudanese);
5. The presence of very common prefixes in a name where the prefix was one of only two strings in a name (example: Mr. Smith).

Aliases that met one or more of the above criteria were flagged for human review. OFAC subject matter experts then reviewed each of the automated recommendations and made final decisions on the flagging of each alias.*

OFAC intends to use these procedures to evaluate all new aliases introduced to the SDN list.

Weak AKAs Appear Differently on SDN List Depending on File Format

Weak AKAs appear differently depending on which file format of the SDN List is utilized.

In the TXT and PDF versions of the SDN List, weak AKAs are encapsulated in double-quotes within the AKA listing:

ALLANE, Hacene (a.k.a. ABDELHAY, al-Sheikh; a.k.a. AHCENE, Cheib; a.k.a. "ABU AL-FOUTOUH"; a.k.a. "BOULAHIA"; a.k.a. "HASSAN THE OLD"); DOB 17 Jan 1941; POB El Menea, Algeria (individual) [SDGT]

This convention also is followed in the alphabetical listing published in Appendix A to Chapter V of Title 31 of the Code of Federal Regulations.

In the DEL, FF, PIP, and CSV file formats, weak AKAs are listed in the Remarks field (found at the end of the record) of the SDN file. In these formats, weak AKAs are bracketed by single-quotes (see Data specification for ASCII Delimited, Fixed-Width and CSV data files at: www.treas.gov/offices/enforcement/ofac/sdn/dat_spec.txt for additional information):

8219@"ALLANE, Hacene"@"individual"@"SDGT"@-0- @-0- @-0- @-0- @-0- @-0- @-0- @"DOB 17 Jan 1941; POB El Menea, Algeria; a.k.a. 'ABU AL-FOUTOUH'; a.k.a. 'BOULAHIA'; a.k.a. 'HASSAN THE OLD'."

In the XML version of the SDN List, there is a Type element for each AKA. The Type can either be 'weak' or 'strong' (see the XML SDN Schema (XSD file) at: www.treas.gov/offices/enforcement/ofac/sdn/sdn.xsd for more information).

(Posted 01/21/11)