At what stages does OFAC recommend accounts be screened?

The correct response indicates that the Office of Foreign Assets Control (OFAC) recommends screening accounts at multiple critical stages. This comprehensive approach is essential for effective compliance with sanctions regulations and helps prevent the facilitation of unlawful transactions.

Screening at account opening ensures that any potential risks related to sanctioned individuals or entities are identified before any financial relationship is established. By screening during the updating of account information, institutions can revisit any changes that may affect compliance status. Periodic screening is crucial for ongoing risk management, as the status of individuals and entities on the OFAC's list can change over time. Finally, screening at the distribution of funds helps to confirm that transactions do not involve any sanctioned parties at the point when funds are transferred.

This multifaceted screening process fosters a proactive stance towards compliance, allowing financial institutions to identify potential issues at various stages of the account lifecycle, thus mitigating risks more effectively than if screening were limited to only one point in time.