In recent years, the financial sector has introduced

payment systems that allow users to send and receive

funds almost instantly, at any time of the day, on any

day of the year. These systems—which allow a payment’s

transmission and the availability of funds to payees to

occur almost in real-time (referred to herein as “instant

payment systems”)

1

—are being developed both in the

United States and abroad. The high velocity of instant

measures in this context.

Each instant payment system has its own unique

characteristics; for example, some allow for domestic

payments only, while others permit cross-border

payments. Accordingly, as the financial system innovates

to improve eciency, OFAC continues to encourage

financial institutions to adopt a risk-based approach to

ensure their sanctions compliance controls and related

technology solutions remain commensurate with the

sanctions risks presented by instant payment systems.

1 While payment transmission and availability of funds to payees occurs in almost real-time in instant payment systems, settlement of payments may

occur instantly or on a deferred basis.

2 A Framework for OFAC Compliance Commitments, U.S. Department of the Treasury, Oce of Foreign Assets Control (2019), available at: https://

home.treasury.gov/system/files/126/framework_ofac_cc.pdf.

of innovative sanctions compliance approaches and

technologies to address identified risks; and (iv)

encourage developers of instant payment systems to

incorporate sanctions compliance considerations as

they develop new payment technologies. This guidance

should aid financial institutions in determining how best

to allocate their compliance resources consistent with

their particular sanctions risks.

Risk Factors and Considerations

for Instant Payment Systems

regulations. To mitigate the risk of violating OFAC

regulations, OFAC recommends that U.S. persons,

including U.S. banks, employ a risk-based approach to

sanctions compliance by developing, implementing,

and routinely updating a sanctions compliance program

that is predicated on and incorporates at least five

essential components of compliance: (1) management

commitment; (2) risk assessment; (3) internal controls;

(4) testing and auditing; and (5) training.

2

SEPTEMBER 2022

OFAC recognizes that not all U.S. financial institutions

are similarly situated, nor do all financial products or

instant payment systems present the same sanctions

risks. Accordingly, there is no one-size-fits-all approach

to managing sanctions risks with regard to instant

payment systems. Each financial institution’s sanctions

A financial institution may consider a variety of

factors in assessing and mitigating the sanctions risks

associated with participating in an instant payment

system. For example, an institution may consider its

geographic locations and the extent of its international

presence; the location, nature, and transactional history

of its customers and their counterparties; the specific

Payment Systems

Domestic instant payment systems—i.e., those in which

all transactions involve only accounts maintained at

U.S. banks, excluding foreign correspondent accounts—

generally pose a lower risk of sanctions exposure than

instant payment systems that permit cross-border

transactions. OFAC expects that

U.S. banks, which are subject

to stringent U.S. regulatory

3 For additional risk factors to consider, see, e.g., OFAC’s Economic Sanctions Enforcement Guidelines OFAC Risk Matrix in the Annex to Appendix

A to 31 C.F.R. Part 501. OFAC notes, however, that not all factors listed therein may necessarily be relevant for evaluating sanctions risk specific to

instant payment systems.

4 These may include transactions that a financial institution already determined were exempt from OFAC sanctions or authorized by a specific or

general license, such as OFAC general licenses authorizing remittances or humanitarian activity that involves sanctioned jurisdictions. For more

information about specific authorizations and exemptions, please visit OFAC’s website.

and other innovative compliance solutions, such as those

that leverage information sharing mechanisms across

financial institutions, which may enhance sanctions

screening functions and reduce false positives. Where

appropriate, based on an institution’s assessment

of risk, OFAC encourages the use of such tools and

Instant Payment Systems

The expectation in instant payment systems that

funds be made available to the payee in real time may

payment technologies are being developed. OFAC also

encourages such developers to incorporate sanctions

compliance features, tools, and contractual clauses

that allow system participants to maintain a sanctions

compliance program commensurate with the risks

presented by the particular instant payment system.

For example, instant payment systems can facilitate

sanctions compliance by enabling communication among

participating financial institutions involved in processing

payments, as such communication is often necessary to

gather information related to potential sanctions alerts.