OFAC Risk Compliance Guide Part 1
How to score and manage the risk of paying a counterparty under OFAC sanctions rules.
TL;DR
TL;DR: OFAC risk is managed by screening each counterparty and scoring borderline matches. Use sanctions_check to ALLOW clean parties and BLOCK flagged ones, and risk_score to route uncertain cases for review.
Why risk matters
OFAC enforcement is strict liability: intent is not required, and civil penalties start at $356,000 per violation. Every counterparty carries some risk until it is screened, and a missed match is costly regardless of good faith.
Scoring borderline matches
The risk_score tool buckets counterparties that are not clear ALLOW or BLOCK decisions, so a human can review them. sanctions_check returns the binary decision, and the 4-Gate protocol sequences them: SCREEN, SCORE, STOP, STAMP.
Practical controls
- Run sanctions_check on every counterparty before payment.
- Apply risk_score to near-matches and ambiguous names.
- STAMP each decision to keep an audit trail.