OFAC Screening for Auto Dealers: What You Need to Know
If you sell cars, you need to screen buyers against the OFAC SDN list. This requirement applies to any transaction involving $10,000 or more. Since the average new car transaction price is over $48,000, that covers virtually every new vehicle sale and most used vehicle sales too.
Why Auto Dealers Specifically?
Auto dealers are classified as financial institutions under the Bank Secrecy Act when they arrange financing. OFAC compliance is part of that obligation. Even cash deals over $10,000 trigger Currency Transaction Report (CTR) requirements and OFAC screening obligations.
The Strict Liability Problem
OFAC violations are strict liability. If you sell a car to someone on the SDN list, you can be penalized regardless of whether you knew they were sanctioned. "The salesperson didn't check" or "we've never had a match before" are not defenses. Civil penalties start at tens of thousands of dollars per violation.
How to Screen at a Dealership
Screen Every Buyer
Make it part of the deal process for every transaction above the threshold. Don't skip it because the customer "looks fine" or is a repeat buyer.
Screen Before the Deal Closes
The right time to screen is during the F&I process, alongside credit checks. Some dealers screen when the buyer's information is first entered into the DMS. Either works, as long as it happens before you hand over the keys.
Screen All Parties
Check the buyer, any co-buyer, and the business name if it's a commercial purchase. If the deal involves a trade-in from a different party, screen them too.
Keep Records
Print or save the screening result and include it in the deal jacket. You want a record showing the name you searched, the date, and the result. This is what an auditor or examiner will ask for.
Train Your Staff
Sales managers and F&I managers should know what OFAC is, why screening is required, and what to do if there's a potential match (stop the deal and escalate to your compliance contact). Document the training.
What to Do If You Get a Match
Don't panic. Most matches are false positives, especially common names. Review the match details: compare the SDN entry's date of birth, nationality, and address against your buyer's information. If you can rule it out, document why and proceed. If you can't rule it out, do not complete the transaction and contact OFAC's hotline at 1-800-540-6322.