OFAC RPPR Interim Final Rule | Foodman CPAs & Advisors

On August 5, 2024, OFAC amended and issued an Interim Final Regulation on Reporting, Procedures, and Penalties Regulations (RPPR) that sets forth standard reporting and recordkeeping requirements and license application and other procedures for OFAC-administered economic sanctions programs. The Interim Final Regulation of the OFAC RPPR requires electronic submission of certain applications to OFAC and describes and modifies certain reporting requirements related to blocked assets and denied transactions. The Interim Final Regulation of the OFAC RPPR would require:

• use of the OFAC electronic Reporting System to submit reports of blocked assets and rejected transactions
• removing the mail option for certain other OFAC reporting types
• Describe the reporting that OFAC may require from financial institutions for transactions that meet certain criteria
• add reporting requirement for each blocked or transferred property

OFAC will seek public comment on this interim final rule for 30 days.

Key Information on the Final OFAC RPPR Interim Regulation Excerpt

• Require applicants to use the electronic OFAC Reporting System (ORS) to submit initial and annual blocked asset reports to OFAC.
• Amending Several Sections of the Regulations to Require Electronic Filings and Remove Mailing Options. OFAC is amending § 501.603(d)(2) to require electronic filing of reports of unblocked or transferred blocked property, consistent with the requirements of revised § 501.603(b)(3)(i). OFAC will accept such reports of unblocked or transferred blocked property pursuant to revised § 501.603(b)(3)(i) via email or ORS. OFAC is also amending § 501.605(a) of the Regulations to require that the documentation and notifications required therein be sent by email, given the time sensitivity of these reports, and to remove the options for fax or mailing. Finally, OFAC requires the submission of documents by electronic mail or the removal of the mailing option in the following sections of the Regulations: § 501.804, 501.805, 501.806, and 501.807. Electronic submission of documents and use of the OFAC website will enable more efficient receipt and processing of reports and requests from the public.
• Amending § 501.603(b)(3)(i) to require reporting within 10 business days of the unblocking or transfer of blocked property, including pursuant to a valid order issued by a U.S. government agency or U.S. court, pursuant to this section. This amendment will allow OFAC to determine the current status of blocked and unblocked property. Reporting is not required for interest payment credits that would not be transfers of blocked property or debits of blocked accounts for normal service charges, in each case as authorized under OFAC sanctions.
• Amending § 501.604(a) to clarify the scope of the term “transaction” for purposes of this section by specifying that the term includes transactions involving securities, checks, or foreign currencies, and the sale or purchase of goods or services, thereby clarifying that securities, checks, foreign currencies, and goods and services are not themselves transactions when they are not delivered as part of a transaction.
• Amending § 501.604(b) to clarify that the information required therein need be reported only to the extent it was available to the requester at the time the transaction was rejected.
• Revising the procedures in § 501.806 for requesting the release of funds blocked due to “mistaken identity” to expand them to a broader category of any property blocked due to “typographical or similar errors leading to the blocking.” OFAC is also narrowing the procedures to be available only to the person who mistakenly blocked the property. In such cases, the person who mistakenly blocked the property may request a “compliance release” from the OFAC Compliance Division. Others may continue to request the release of the property through license applications submitted to the OFAC Licensing Division.
• Adding a note to § 501.602 to describe reporting OFAC may require financial institutions to provide information about accounts or transactions that meet specified criteria to assist in identifying blocked property. If OFAC has reason to believe that an account or transaction (or class of transactions) may involve property or interests in property of a blocked person, OFAC may direct the financial institution to report transactions that meet specified criteria and notify OFAC before processing such transactions. Upon review, OFAC may determine that the reported transaction involves property or interests in property of a blocked person and may take further action.

Do you currently use ORS to submit initial and annual blocked property reports and rejected transaction reports to OFAC?

Will you be able to update your OFAC sanctions compliance program and procedures to administer reporting requirements under the OFAC RPPR?

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