OFAC Strikes Again!

Just in time for the post-Labor Day rush, OFAC has published revised and new reporting requirements. The final rule, published in the Federal Register on August 25,1997, revises and reorganizes OFAC's recordkeeping and reporting requirements. The rule standardizes record retention periods at five years. This record retention period should be familiar - it coincides with Bank Secrecy Act record retention. The five year period runs from the date the property was blocked or retained or from the date the property is unblocked or released. These retention rules are contained in 31 CFR 501.601. During the five year period, all information relevant to the blocked or retained transaction must be maintained in retrievable form and made available to law enforcement officials, upon request.

In addition to the consolidation of reporting requirements, there is a new reporting system contained in 31 CFR 501.603. This section requires reporting to OFAC within 10 days of the date the property is blocked or the funds retained. Notifying OFAC is not new. What is new is the cumulative annual report. This requires an annual comprehensive report on all blocked property held as of June 30 of the reporting year. The annual report is, in effect, a status report on the property blocked or retained by the bank. The real catch is that the first annual report is due September 30,1997.

(That's right - OFAC, having published this new rule on August 25, 1997, is giving you about a month to get the reports done!)

Annual reports must be filed on form TDF 90-22.50. Copes of this form are available through OFAC. Call OFAC at (202) 622-0077. The form is in a file titled "OFAC Press Releases and Miscellaneous Documents."

The good news is that this report only has to be filed by banks that actually have blocked or retained accounts. Banks that are lucky enough to have avoided specially designated nationals as customers do not have to file. The report will provide OFAC with an annual inventory of blocked and retained accounts.

Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 11, 9/97