754. Is the U.S. originating bank, U.S. intermediary bank, or U.S. beneficiary bank required to independently verify that a person subject to U.S. jurisdiction is not engaging in a direct or indirect financial transaction as defined in § 515.209 when processing Cuba-related transactions?
No. To the extent the transaction involves an entity or subentity on the Cuba Restricted List, a financial institution can rely on the statements of its customer or information available to them in the ordinary course of business that the transaction is authorized unless it knows or has reason to know the transaction is not authorized. A banking institution is expected to conduct a level of due diligence commensurate with its overall risk profile and internal compliance policies and procedures with respect a transaction involving Cuba or a Cuban national and which may be authorized pursuant to the Cuban Assets Control Regulations.
Date Updated: September 29, 2026
Updated on Sep 29, 2026
Cuba Sanctions
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754. Is the U.S. originating bank or U.S. beneficiary bank required to independently verify that a person subject to U.S. jurisdiction is not engaging in a direct financial transaction as defined in § 515.209 when processing Cuba-related transactions?
No. To the extent the transaction involves an entity or subentity on the Cuba Restricted List, a financial institution can rely on the statements of its customer that the transaction is authorized unless it knows or has reason to know the transaction is not authorized. A financial institution is expected to do its normal due diligence with respect to a transaction involving Cuba or a Cuban national. [11-08-2017]
[9-30-26 Update – FAQ amended to reflect expansion of 560.209 to “indirect” financial transactions, and to amend the statement concerning diligence expectations]
1) See comments to FAQ # 753. As with that one, OFAC offers, through the FAQ, a safe harbor that is not otherwise evident from the regulations. See section 3(ii) of General Note on the terms "knowingly," "should have known" and "reason to know" in the Primary Sanctions, Secondary Sanctions and Derivative Designation Contexts (System Ed. Note). FAQ # 753, FAQ # 754 and FAQ # 755 are significant insofar as they appear to link OFAC's standard "may rely" language to a lack of an expectation that U.S. persons "independently verify" the statements on which they are relying. This FAQ is particularly significant insofar as explicitly says that "A financial institution is expected to do its normal due diligence with respect to a transaction involving Cuba or a Cuban national," while at the same time acknowledging, at least in the case of assessing whether "person subject to U.S. jurisdiction is not engaging in a direct financial transaction as defined in § 515.209 when processing Cuba-related transactions," that " its normal due diligence" would not entail independent verification of statements made by persons subject to U.S. jurisdiction.