How to Conduct a Background (OFAC) Check on Your SPV Investors

🛡️ How to Conduct an OFAC Check on Your SPV Investors

Welcome to All Things SPVs, Sally’s educational series designed to demystify the world of Special Purpose Vehicles. In this post, we’re covering a crucial compliance step for SPV organizers: how to run an OFAC check on your investors.

We’ll walk you through using the free Sanctions List Search tool provided by the U.S. Office of Foreign Assets Control (OFAC) and give you tips on how to document your diligence.

⚠️ Disclaimer: This is not legal advice. We’re focusing specifically on OFAC checks within the context of SPVs. If you’re unsure about compliance or your specific use case, please consult a qualified attorney.

🤔 Why Run an OFAC Check?

When you’re raising capital through an SPV, it’s considered best practice to run a quick background check on your investors. While there are robust (and expensive) tools available through paid platforms, these are usually more than you need for basic SPV compliance.

Instead, the U.S. government offers a free and simple tool: the OFAC Sanctions List Search.

This allows you to:

• Enter a name
  
  
• Run it against the U.S. government’s list of sanctioned individuals and entities
  
  
• Confirm whether your investor appears on any watchlists
  
  

🔍 Step-by-Step: How to Use the OFAC Sanctions Search Tool

Here’s how you can run a check in less than 5 minutes:

1. Search for the OFAC Tool

• Open Google and search for "OFAC search".
  
  
• The official OFAC Sanctions List Search site is typically the first result.
  
  
• Click on the link to open the tool.
  
  

2. Enter the Investor’s Name

• You’ll land on the search page, which includes options to fine-tune your search parameters.
  
  
• Start by entering the name as-is, without changing any settings.
  
  
• For example: Try entering Donald Trump — in most cases, no result will appear.
  
  

3. Adjust the Search Sensitivity (Optional)

If you want to broaden the search, adjust the “Minimum Name Score.”

• Lowering this score (e.g., to 75) will make the search more flexible.
  
  
• This is helpful for catching misspellings or name variations (e.g., Joe vs. Joseph).
  
  
• Try searching for Joseph Biden with a lower score and see how the results change. Joseph Biden is also not on the OFAC naughty list.
  
  

The goal is to get comfortable that your investor isn’t flagged, even with broader search criteria. I like to use a “Minimum Name Score” value in the mid 90s. 

📁 Save Your Results

Once you’ve run the search, we highly recommend saving the results:

• Take a screenshot or
  
  
• Print to PDF
  
  

Keeping a record of your OFAC checks shows that you’ve done your diligence. This is especially helpful if a bank, auditor, or CEO ever asks for proof.

💡 Bonus Tip

We’ve created this blog post as a companion to our video walkthrough, which you can find on the Sally YouTube channel. Feel free to watch it if you prefer a visual demo of the process.

✅ In Summary

Conducting an OFAC check is:

• Quick
  
  
• Free
  
  
• Essential for basic SPV compliance
  
  

By following these steps and saving your results, you’re showing that you’ve taken appropriate measures to ensure your investor base is compliant with U.S. regulations.

For more tips and guides on running your SPV with confidence, check out the full All Things SPVs series at Sally.co.