Terrorist Searches and the Patriot Act
In the aftermath of the events of 9/11, Congress passed the U.S. Patriot Act. Its official title is “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.”
This law covers a number of important areas. It directly affects the responsibilities of financial institutions to know their own costumers in order to prevent money laundering activities that finance terrorism and narcotics trafficking. The Act defines the concept of a "financial institution" very broadly. Although the law does not mandate additional pre-employment screening or background checks for American workers (with the exceptions of those involved in transporting of hazardous materials), the new law may well have a bearing upon employment practices, especially for those employers involved in the financial industry.
For financial institutions subject to the provisions of the Patriot Act, ESR would recommend that a terrorist search, consisting of the following searches, be used for employees. Prudent risk-management would suggest that any financial institution in the course of exercising due diligence would want to know as much about their employees as the law requires them to know about their clients.
There are a number of terrorist databases a maintained by various parts of the US government, as well as foreign governments and International organizations. Private research firms DO NOT have access to internal government watch lists, intelligence, or data. However, these are databases that research firms can utilize on behalf of private employers. The key is to access all of the major lists. This is typically done through third party services that regularly scan and update these lists into a searchable database.
ESR utilizes sources that continually update the Terrorist Search. The search includes:
- 1. The Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury search
The US Treasury had been involved in sanction programs since the time of the War of 1812. According the OFAC web site:
The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. ……. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.
There are a number of OFAC programs. The primary OFAC tool is the Specially Designated Nationals (SDN) and Blocked Person list, which can be individuals, groups, or other entities that are not necessarily tied to a specific country. According to an FAQ on the OFAC site:
As part of its enforcement efforts, OFAC publishes 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. Collectively, such individuals and companies are called "Specially Designated Nationals" or "SDNs." Their assets are blocked and U.S. persons are generally prohibited from dealing with them. http://www.treas.gov/offices/enforcement/ofac/faq/
OFAC also administers Sanctions programs aimed at countries or jurisdictions or specific activities, such as terrorists, narcotic and diamond traffickers, or Weapons of Mass Destruction.
- 2. European Union Consolidated List --This is list is maintained by the EU.
- 3. OSFI List-This is a list supplied by the Canadian Office of the Superintendent of Financial Institutions and contains names of individuals and organizations subject to the Regulations Establishing a List of Entities made under the Criminal Code or the United Nations Suppression of Terrorism regulations.
- 4. UK Terrorist List- This list is maintained by the Bank of England.
Databases Currently Used by ESR
U.S. Government Lists
- OFAC Specially Designated Nationals (SDN) & Blocked Persons
- OFAC Sanctioned Countries
- Department of State Trade Control (DTC) Debarred Parties
- U.S. Bureau of Industry & Security (formerly BXA): Unverified Entities List, Denied Entities List & Denied Persons List
- FBI Most Wanted Terrorists & Seeking Information
- FBI Top Ten Most Wanted
Lists from Other Countries
Lists Maintained by International Organizations
- INTERPOL Most Wanted List
- United Nations Consolidated Sanctions List
- Politically Exposed Persons List (Private sources)
- European Union Terrorism List
- World Bank Ineligible Firms (Go to Index to Procurement Information to locate current list of Ineligible Firms and individuals who either directly or indirectly control those firms)
- Non-Cooperative Countries and Territories*
* This search is generally available in 24 hours. In the event of a possible match, additional research is needed to determine if a name belongs to an actual applicant. The cost of such additional research to establish positive identification is charged separately. Employers should be aware that establishing positive identity can be difficult. Any match must be handled on a case by case basis.
Limitations on Using the Terrorist Search for Employment
When utilizing a Terrorist Search for employment purposes, there are other considerations:
- All employment screening is conducted under the federal Fair Credit Reporting Act (FCRA), which requires the use of reasonable procedures to assure maximum accuracy. The Terrorist Search may contain many common names and at the same time not provide sufficient identifiers to determine if any match belongs to an applicant. OFAC has a hotline to assist employers in the event of a possible match where there are insufficient identifiers on the search results.
- Employers should also be aware that a person on a list may take measures to hide their true identity, Any terrorist search should utilize a number of broad based and overlapping screening tools, and not merely a search of a database. As with any criminal record database, a terrorist database can provide false negatives for a number of reasons, including errors caused by name variations and the completeness and accuracy of the data.
- In addition, employers need to be aware that a large number of names may be of Middle Eastern origin. Under the FCRA, a background screening may not be used in violation of any state or federal anti-discrimination laws. As a result, it is important that all efforts be made to determine if there is a positive match before taking any adverse action to prevent an employer from being the subject of a complaint for discrimination in hiring based upon national origin or ethnicity.
Other Patriot Act Services Offered by ESR
ESR can assist a bank in a Know Your Customer Program with the following searches:
- Terrorist Search (see above).
- SSN trace report
- Current and previous addresses
- Current and previous real property
- Financial background (UCC, bankruptcy, liens and judgments)
- Criminal and Civil Search
- Vehicle and other property ownership
- Death records
- Employment verification
For additional information, contact ESR.