What is OFAC

In this chapter, the SWIFT, which is the financial communication system used by all financial institutions, will be explained. Today, most of the countries and financial institutions take precautions to avoid money-laundering and financial crimes. The SWIFT system will be examined in relation with financial communication, compliance, money laundering, know your customer, and sanctions. Public became aware of the sanctions when HSBC has agreed to pay $1.92 billion dollars to state authorities in 2012 for transfering dollars illegally into US. Banks apply “Know Your Customer” procedures to avoid such risks. In relation with sanctions, precautions of SWIFT system will be defined. SWIFT has started a new application namely KYC Registry which enables to have necessary information about the customers in international trade, through cross borders. The reasons why this applicatiıon must be used, how risk will be mitigated, by sharing information with maximum transparency and SWIFT's new KYC application will be defined.