Office of Foreign Asset Control (OFAC) prohibits attorneys from accepting fees from any individual or organization shown on the SDN list (Specifically Designated Nationals). According to an ABA publication “If the client is listed, the attorney may collect fees from the client only if and when OFAC grants a specific license. …
There are two issues a firm faces when dealing with any complex conflicts search including the SDN List.
- How to get the SDN list into your conflicts data base
- Technology needed to conduct complex searches
The best way to search the SDN List is to first import the entire list into a database. Luckily the list is available in XML format, therefore download the XML Version of the SDN List and the XML SDN Schema (XSD File). The Schema XSD file just validated the data types used in the XML version of the list.
Once the list is imported into your database you should be able to just search it … right? One major issue regarding conflict searches revolves around the speed and accuracy of the internal search engine performing the search. Many search tools today rely strictly on a database search engine to hunt for the data similar to looking up a client’s name. However, this type of search may not be fast enough nor provide what you need. For example, a user might search for (“Jim” or “James”) and “Hammond”. In this case the software might generate a SQL query to select from a table name and a field name where “Jim” might occur. The system would then look through dozens of tables in the database for which there might be a million or more records, only to find a single occurrence of “Jim,” then the system would have to perform the same process for “James,” and another pass through for “Hammond.” The system would then compare the three record sets and return to the user one or more hits. Not a very efficient process even for a simple search of one name. As powerful as today’s databases are, they are inefficient in performing complex searches in an ad-hoc fashion. Looking for something like “Jim” within five words of “Hammond?” Forget it.
The technology needed incorporates a full-text search engine that is designed to find and compare results in an instant. This engine performs searches from an “index”. Think of the index as the back of an encyclopedia. Instead of searching through each page of the entire book, you would simply go to the index, look down the list in alphabetical order for the word “Swahili,” and see that it shows that there are references to “Swahili” on various pages. This is exactly how a full-text search engine works. It continually builds an index of all the words in your database and searches on the index to find conflict hits, rather than searching directly in the database. Full-text search engine find search results in a split-second.
This technology allows the firm to “index” the entire SDN List that was imported into a set of database tables, the indexer automatically updates the index of all words contained in the SDN List. Searches can then be immediately performed on the newest SDN List. Since the SDN List is periodically updated, OFAC allows a firm to subscribe to a notification service that alerts the firm when a new list is available for downloading. Routine changes to the SDN list include both additions and deletions.
All firms should be aware of their requirements under OFAC. A best of breed search engine should also provide phonetic and fuzzy logic search capabilities. This will further assist the firm in finding complex names under different spellings that might appear on the SDN List. Firms requiring additional information about OFAC and the SDN List should contact OFAC and their professional liability insurance carrier directly.