Final answer:
The main answer is False. OFAC does not permit transactions with individuals on the SDN list merely based on the presence of a solid AML policy. Specific licenses from OFAC are necessary to engage in such transactions.
Step-by-step explanation:
The question addresses whether OFAC permits transactions with individuals on the SDN list, given that the financial institution has a robust AML policy. The main answer to this is B) False. The Office of Foreign Assets Control (OFAC) maintains the Specially Designated Nationals (SDN) list, which generally prohibits U.S. persons, including financial institutions, from conducting transactions with individuals and entities on the list, regardless of the institution's Anti-Money Laundering (AML) policies.OFAC may provide specific licenses that authorize certain transactions with SDN-listed individuals under certain circumstances. However, such licenses are exceptions and must be applied for and granted by OFAC; they are not automatically granted based on the institution's AML policies. Therefore, the statement that OFAC permits transactions with SDN-listed individuals solely on the basis of a solid AML policy is incorrect.In conclusion, while a strong AML policy is crucial for financial institutions to prevent and detect potential money laundering activities, it does not in itself allow for transactions with individuals on the SDN list. Institutions must seek OFAC authorization for any transactions with these individuals.