Kusserow on Compliance: Employee screening against the Specially Designated Nationals and Blocked Persons list

A frequently asked question by compliance officers for health care organizations is whether they should be screening employees and others with whom they do business against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons list (SDN). OFAC is part of the U.S. Department of Treasury that determines whether or not an entity or individual is permitted to do business with the United States. The SDN is “….a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.”

Tom Herrmann, JD—who served over 20 years in the HHS Office of Inspector General (OIG) Office of Counsel to the IG and subsequently 6 years as an Appellate Judge for the Medicare Appeals Board—was asked to comment on this issue. He noted that the SDN list was primarily designed for use by financial institutions; they are not permitted to deal with anyone on the list. As a result, OFAC alerts can sometimes show up on credit reports. It is safe to assume that employers, also, would prefer not to hire someone on the SDN list. Those industries most involved in OFAC screening are international businesses, particularly in banking, finance, and insurance. He made special note of the fact that screening against the OFAC SDN List is not required for healthcare providers or managed care and may create more problems than benefits from doing it.

Ashley Felder is a Human Resources Consultant who warns that from an employer’s perspective, a significant problem is that the list consists of a very large number of common Arabic names that can be transliterated into English many different ways that create many false hits. This opens up the possibility of discriminatory practices unless a great deal of care is used in applying the information. In view of the fact that there is not specifically identifiable data that can confirm a match, means that a potential hit cannot be fully resolved without confronting the individual for a detailed briefing of their background. This can be very troublesome and may lead to charges of discrimination, profiling, defamation of character, etc. The result is that OFAC may or may not be a useful supplement to a standard criminal check or screening against state credentialing agencies, the OIG List of Excluded Individuals, and Medicaid sanction lists.

Jillian Bower, Vice President of the Compliance Resource Center that provides sanction-screening tools and services, noted that the overwhelming majority of healthcare related entities “do not” screen against the OFAC SDN. She explained that there are some issues and potential complications in using it for employment screening, as result of the fact that for the most part, the list is name-only with multiple aliases per person, and is a mix of individuals and organizations. Dates of birth are usually missing, or multiple possibilities are listed. Address history, if present, only includes city and country. So OFAC checks are name-only, and making a positive identification can be difficult, if not impossible. As such, the Compliance Resource Center (CRC) does not recommend screening OFAC, unless there are special concerns or reasons for doing so, such as operating outside the United States in areas designated by the Department of Treasury for special concern.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.