In recent years, the financial sector has introduced instant payment systems that allow users to send and receive funds almost instantly, at any time, on any day of the year. These systems, being developed in the United States and abroad, enable real-time transmission and availability of funds to payees. The rapid pace and increasing volume of instant payments have raised questions, particularly from banks, about implementing effective sanctions compliance measures. Each instant payment system has unique characteristics, such as domestic-only or cross-border capabilities. As the financial system innovates for greater efficiency, the Office of Foreign Assets Control (OFAC) encourages financial institutions to adopt a risk-based approach to ensure their sanctions compliance controls and technology solutions match the risks presented by instant payment systems. This guidance issued in September 2022 reaffirms the need for a risk-based approach, highlights relevant factors in determining such an approach, encourages the development of innovative compliance technologies, and urges developers to consider sanctions compliance in new payment technologies. This guidance aims to help financial institutions allocate their compliance resources effectively based on their specific sanctions risks.
Read the guidance here: Sanctions Compliance Guidance for Instant Payment Systems