What Are You, Adjustor or Terrorist Hunter? The surprising answer, according to Uncle Sam, is: BOTH! 1
Yes, consider yourself drafted to play a role in the defense of America.
Now, you may be asking, how can I be both? 2 Turns out national defense is not all Kiefer Sutherland style kicking in of doors and raiding terrorist safehouses!
Consider yourself officially introduced to the Office of Foreign Assets Control (OFAC), the wing of the Treasury Department charged with administering and enforcing trade sanctions. 3 OFAC dictates who you can and cannot do with business with. Not surprising, Iran and North Korea are almost entirely off limits 4, along with such groups as narcotics traffickers and terrorist organizations.
Due to the ever increasing amount of international trade, coupled with the relative ease of moving funds across borders, the U.S. is turning to banks and insurance companies 5 to cut off funding sources. This places you directly on the frontline6 in the war on terror. Yes, you have been called upon (aka DRAFTED) to protect your country from foreign enemies.
Patriotic? Great…you’ve got your inspiration. Not feeling so patriotic? No matter! Uncle Sam has also raised the stakes slightly by imposing strict liability on any U.S. person who engages in the defined prohibited transactions. For insurers, this means that any transaction that qualifies as a prohibited transaction can result in fines of millions of dollars. Paying a death benefit to someone out of country? Be very careful!
What You Can Do to Defend the U.S. (and Avoid Steep Sanctions)! First, check all policies to ensure you are not insuring any prohibited persons or groups. Don’t have a list of “prohibited persons/groups” at your desk? Here is your link.
Now you’ve got the list!
Consider designating a compliance officer to make certain you are not violating any federal provisions. Circulate a written compliance program and ensure that it is followed. That way if a mistake is made, you can point to your program and training as significant mitigating factors. Good faith efforts may go a long way in reducing potential penalties. Also, watch out for blocked financial institutions, such as the Bank of Khartoum, as the company issuing payment to such an organization will likely not get those funds returned and may be subject to civil penalties simply for initiating a payment to a bank that has been declared a Specially Designated National of Sudan.
Every insurance policy we have reviewed includes an exclusion clause providing that proscribed beneficiaries or excluded transactions will not be compensated. Usually the policy states words to the effect that “whenever coverage provided by this policy would be in violation of U.S. export controls or trade sanctions, such coverage is null and void.”
In cases where applicable state insurance law and the OFAC policy conflict, bet HEAVILY on the OFAC and follow the federal dictate…ALWAYS! Whilst the OFAC has thus far refused to declare whether they believe OFAC rules pre-empt state law, the official response has been something along the lines of:
“We operate under the emergency powers of the President”
“We implement federal statutes with names like the ‘Trading with the Enemies Act'”
“You do not want to mess with us”
If you do discover that an employee or beneficiary may receive—or, GASP, has already been given benefits, notify the OFAC compliance office. They will work out the specifics of the case and take it from there. Any funds that would otherwise go to a blocked individual should be placed in an interest-bearing account established on the books of a U.S. financial institution. Blocked policies and policy payments must be reported within 10 days to OFAC’s Compliance Program Division by fax at (202) 622-2426. This can occur, for instance, where you are insuring an employer and don’t have the named individuals on the policy…or if you discover somewhere down the line that an injured worker is actually a Cuban national.
Keep these simple rules in mind as you perform your work as a soldier in the War on Terror. You have an important role to play in keeping America safe…so get out there and do your patriotic duty for Uncle Sam!
Have any questions about the Office of Foreign Assets Control, the Treasury Department or your role in the War on Terror? Call Alec Bradford at (619) 990-2897 or email him at email@example.com.
Alec T. Bradford, a Southern California native, received his Bachelor of Science in Political Science in 2007 from California State Polytechnical Institute at Pomona. He received his Juris Doctorate and graduated Cum Laude in 2010 from Thomas Jefferson School of Law in San Diego. While at Thomas Jefferson School of Law he received the Witkin Award for Academic Excellence, CALI Excellence for the Future Award, and the Jefferson Medal for Chinese Legal System & Recent Reforms for the 2009 China study-abroad program. In Spring, 2010, he received the same awards for European Union Law. He is currently working at the San Diego office of Bradford and Barthel and enjoys sports, including surfing, sailing, and skiing. He also loves traveling.
1 Yes, really!
2 You’re probably also asking, where do I sign-up for hazard pay? That answer ain’t surprising: you don’t!
3 Don’t stop reading! You’re probably certain that there is no reason you should care about this and that is has nothing to do with you or terrorist hunting. If that’s your hunch, you are WRONG!
4 And you thought Ventura was tough! Aren’t you glad your workers’ compensation policy doesn’t extend to Iran?
5 Yes, you!
6 …metaphorically speaking, of course!
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