For Entertainment Purposes Only: SDN Search

On December 7, 2011, OFAC debuted its own online SDN Search Tool.

Accompanying the tool is a formidable disclaimer (I've taken some liberties):

“This SDN Search application (“SDN Search”) is designed to facilitate the navigation of the Specially Designated Nationals and Blocked Persons list (“SDN List”).

SDN Search uses literal character matching logic to identify exact matches between word or character “strings” exactly as entered into SDN Search, and any name or other information exactly as it appears on the SDN list.

SDN Search will not detect misspellings or other incorrectly entered text, and will not return near matches to, or other variations of, the entered text.

SDN Search may suddenly accelerate to dangerous speeds.

Discontinue use of SDN Search if any of the following occurs:

• itching
• vertigo
• dizziness
• tingling in extremities
• loss of balance or coordination
• slurred speech
• temporary blindness
• profuse sweating
• heart palpitations

Do not taunt SDN Search.

Use of this system implies understanding that searches performed by SDN Search are conducted at the user’s own risk, and that the search results provided by SDN Search do not represent an official confirmation by the Office of Foreign Assets Control or the Department of the Treasury of the existence or absence of a match between any information entered by the user and any information contained on the SDN List.

The use of SDN Search does not limit or excuse any liability for any act undertaken as a result of, or in reliance on, such use.”

Donning appropriate safety gear; I tested my favorite SDN “Daytona Pools, Inc.” with some variations.

The listing:

“DAYTONA POOLS, INC., 225 Syracuse Place, Richardson, TX 75081

[LIBERIA]”

Target Text	Hit?
Daytona Pools	Yes
Daytona Pools Incorporated	No
Daytonapools	No
Daytona*Pools	No
Dayt0na Pools	No
Daytona Poo1s	No
Daytona Pool	Yes
Dayton A Pools	Yes
Daytona Polos	No
Daytona Poods	No
Dayton A Polos	No

In addition to misspellings, near matches or mistakes in data entry warned about in the disclaimer, SDN Search does not recognize “glued names” (Daytonapools) or fully elaborated names (Daytona Pools, Incorporated.) These 2 variations have been featured in recent OCC tests of OFAC screening tools.

With all of the limitations of the SDN Search tool (both in search mechanics, and 'fitness for decision-making') it's hard to imagine an operational, 'prime-time' use for this tool.

When in doubt, blame OFAC!

It seemed so simple; Ann Jones, a writer for The Nation, wired rent money from her account on a US bank to her landlady, Heidi, in Norway. Well, she tried to, at any rate.

Heidi didn't get the money. Ann called her bank, to find out what went wrong. Her bank told her the hold-up was her fault, she hadn't provided enough information about herself on the wire. She provided the additional details.

A few days later, Heidi still hadn't received the money. Ann called her bank again. The bank insisted that they didn't know where the money had gone, it had gone out of the bank, and they had collected the wire fee. They assured Ann that this time it wasn't her fault.

The bank told her that OFAC was holding up her wire transfer.

At this point in the narrative, I will pause to let you run over to your favorite sanctions screening software. You can search on “Ann Jones”, “Jones”, “Heidi”, and if you have extra time, see if there are any Norwegian banks or bank branches located in Norway on the OFAC list.

That didn't take long did it? Because, well, they aren't there.

And not to leave you in suspense, some days, maybe a week after Ann provides the additional information, the funds turn up in Heidi's account.

Ann recounts her misadventures with OFAC in her online article Me and OFAC and Ahmed the Egyptian.

Except OFAC never had a single thing to do with her wire transfer.

Key items in the story actually point the finger at Heidi's bank in Norway. They are:

• a wire transfer from a bank in the US to a bank in Norway
• the wire is held up for lack of information about the originating party 
  the funds are not being held at the US bank
• providing additional information about the originating party gets wire moving again.

The more likely culprit was EU 1781, payments transparency regulation base on FATF SR VII. It requires banks in the EU/EAA to monitoring incoming cross-border wire transfers for certain standards of originating party information, and to obtain that information if it is missing. It's not a new rule, the law was enacted in 2006.

The US bank should have know about it, and certainly could have explained as much to Ms. Jones. They chose not to. They chose to blame the holdup on OFAC. Actually, put another way, they chose to tell a story to a journalist that would fall apart the moment you searched for “Jones” on the SDN list. It just doesn't make any sense. And there's really no excuse for misleading their customer.

I suppose at the end of the day everything worked out; the bank got a pesky customer off the phone, a journalist got fodder for an interesting piece, Heidi eventually got her rent money, OFAC got to gather information on Ms. Jones under the guise of helping her trace the wire transfer while retaining the air of mystery that comes with good misinformation.