OFAC Issues FAQs on Reporting, Procedures and Penalties Regulations
The Treasury’s Office of Foreign Assets Control released two new Frequently Asked Questions related to its reporting, procedures and penalties regulations (see 1906200036), according to a Feb. 20 notice. The FAQs provide updated instructions and “incorporate” new requirements for filing reports with OFAC on blocked property, unblocked property and rejected transactions.
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In FAQ 819, OFAC clarified that it expects all U.S. people and people subject to U.S. jurisdiction, “including parties that are not U.S. financial institutions,” to comply with the regulations. Before the regulations took effect last year, only U.S. financial institutions were required to submit reports on rejected funds transfers to OFAC, the agency said. OFAC added that it is continuing to review public comments (see 1907300038, 1907290015 and 1907230054) on the regulations and said it “welcomes further feedback as we assess whether any clarification or modification to the rule is appropriate.” OFAC said it is seeking feedback on the “business impact of this rule; examples of rejected transactions that are proving challenging to report; the quantity of rejected transactions; and the types of information in the filer’s possession for a rejected transaction report.”
In FAQ 820, OFAC clarified that it expects filers of rejected transaction reports to only report information “in the filer’s possession” and does “generally” not expect reporters “to seek further information from their counterparty solely to obtain additional information.” OFAC did say, however, that it expects all rejected transaction reports to include “required information that is applicable in all reject scenarios,” including information about the submitter of the report, the date the transaction was rejected, the “legal authority” under which the transaction was rejected and any other “relevant documentation.”