On Friday, the Office of Foreign Assets Control (OFAC) published an interim final rule that will amend the Report, Procedures and Penalties Regulations, 31 C.F.R. Part 501, effective August 8, 2024. The updates include:

  • Electronic filing and submission requirements: Filers will generally be required to use the electronic OFAC Reporting System (ORS) to submit (1) initial reports of blocked property (which will also need to be maintained for the filer’s records); (2) annual Reports of Blocked Property; and (3) rejected transaction reports. Filers will also be required to submit the required documentation and notifications related to unblocked or transferred blocked property via email. Reports of unblocked or transferred blocked property can be submitted via email or ORS.
  • Unblocked or transferred blocked property reports: Filers will be required to submit unblocked or transferred blocked property reports (via email or ORS) within 10 business days of the unblocking or transfer, including pursuant to a valid order issued by a government agency or court.
  • Rejected transaction reports: The interim final rule clarifies that non-financial institutions’ rejected transaction reporting obligations includes transactions related to securities, checks, or foreign exchange, as well as sales or purchases of goods or services. The interim final rule also clarifies that the information that must be reported for a rejected transaction only applies to the extent the information is available to the filer at the time the transaction was rejected.
  • Compliance release requests for blocked property: The interim final rule extends the procedure for unblocking funds believed to have been blocked due to mistaken identity to any property blocked due to “typographical or similar errors leading to blocking.” Requests to release those funds can be emailed to OFAC’s Compliance Division. Only the person who mistakenly blocked the funds, however, may request a Compliance Release. Others will be required to request an unblocking license from OFAC’s Licensing Division.
  • Additional reports financial institutions may be required to provide: Under the interim final rule, if OFAC has reason to believe an account or transaction may involve a blocked person’s property or property interests, OFAC may issue instructions to a financial institution that (1) provide information or criteria to help identify the blocked property; or (2) require the financial institution to report transactions meeting specific criteria and notify OFAC before processing those transactions.

Interested parties can submit written comments about the interim final rule until June 10.