Exam CRCM topic 1 question 257 discussion

State National Bank, like any financial institution, should check the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list for all transactions, regardless of the nature of the transaction or the customer involved. OFAC regulations require financial institutions to screen transactions against the SDN list to prevent transactions involving sanctioned individuals or entities. Even though some transactions may seem routine or low risk, failure to screen them against the SDN list can expose the bank to potential liability if the transaction involves a prohibited party. Therefore, State National Bank should check the OFAC SDN list for all transactions to ensure compliance with OFAC regulations and mitigate the risk of facilitating transactions with sanctioned parties.