OFAC Issues New Sanctions Compliance Guidance For Instant Payment Systems

On September 30, 2022, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury published its "Sanctions Compliance Guidance for Instant Payment Systems" (the Guidance) designed to help financial institutions allocate their compliance resources consistent with their particular sanctions risks. In recent years, the financial sector has introduced payment systems that allow users to send and receive funds almost instantly. Because of the high velocity of instant payments, along with increasing values and volumes of such payments, the Guidance emphasizes the need for robust compliance measures in this context. Specifically, the Guidance (i) reaffirms that financial institutions should take a risk-based approach to managing sanctions risks; (ii) highlights key factors that may be relevant in determining that risk-based approach; (iii) encourages the development and deployment of innovative sanctions compliance approaches and technologies to address