OFAC RPPR Interim Final Rule - Foodman CPAs and Advisors

On 05/08/2024, OFAC amended and issued an interim final rule on the Reporting, Procedures and Penalties Regulations (RPPR) which sets forth standard reporting and recordkeeping requirements and license application and other procedures relevant to the economic sanctions programs administered by OFAC. The OFAC RPPR interim final rule requires electronic filing of certain submissions to OFAC and describes and modifies certain reporting requirements related to blocked property and rejected transactions. The OFAC RPPR interim final rule would require:

use of the electronic OFAC Reporting System for submission of reports related to blocked property and rejected transactions
removal of the mail option for certain other types of OFAC submissions
describe reports OFAC may require from financial institutions for transactions that meet specified criteria
add a reporting requirement for any blocked property that is unblocked or transferred

OFAC is soliciting public comments for 30 days on this interim final rule.

OFAC RPPR Interim Final Rule excerpt highlights

Require filers to use the electronic OFAC Reporting System (ORS) for submission to OFAC of initial reports of blocked property and Annual Reports of Blocked Property.
Amending several sections of the Regulations to require electronic submissions and to remove options for mail submission. OFAC is amending § 501.603(d)(2) to require electronic submission of reports of unblocked or transferred blocked property, as required pursuant to 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 either email or ORS. OFAC is also amending § 501.605(a) of the Regulations to require submission of the documentation and notifications required therein by email, given the time sensitivity of these reports, and to remove the options for submission by facsimile or mail. Finally, OFAC is requiring email submission or removing the options for mail submission in the following sections of the Regulations: § 501.804, 501.805, 501.806, and 501.807. Electronic submission and use of OFAC’s website will allow for more efficient receipt and processing of reports and requests from the public.
Revising § 501.603(b)(3)(i) to require reports within 10 business days of when blocked property is unblocked or transferred, including pursuant to a valid order issued by a U.S. government agency or U.S. court, as set out in that paragraph. This amendment will enable OFAC to ascertain the current status of blocked and unblocked property. Reports need not be submitted for credits of interest payments that would not be transfers of blocked property or debits to blocked accounts for normal service charges, in each case as authorized pursuant to OFAC sanctions.
Amending § 501.604(a) to clarify the scope of the term “transaction” for purposes of that section by specifying that the term includes transactions related to securities, checks, or foreign exchange, as well as sales or purchases of goods or services, thereby clarifying that securities, checks, foreign exchange, and goods and services are not in and of themselves transactions, when not provided as part of a transaction.
Amending § 501.604(b) to clarify that the information required therein must be reported only to the extent the information is available to the filer at the time the transactions was rejected.
Revising the procedures at § 501.806 for requesting release of funds blocked due to “mistaken identity” to extend to a broader category of any property blocked due to “typographical or similar errors leading to blocking.” OFAC is also narrowing the procedures so they are available only to the person that mistakenly blocked the property. In these cases, the person that mistakenly blocked the property may request a “Compliance Release” from OFAC’s Compliance Division. Others may continue to request unblocking of property through license applications submitted to OFAC’s Licensing Division.
Adding a note to § 501.602 to describe reports OFAC may require financial institutions to provide about accounts or transactions that meet specified criteria to aid in the identification of blocked property. If OFAC has reason to believe an account or transaction (or class of transactions) may involve the property or interests in property of a blocked person, OFAC may instruct the financial to report transactions that meet specified criteria and to notify OFAC prior to processing such transactions. Upon review, OFAC may determine that a reported transaction involves the property or interests in property of a blocked person and may take further action.

Are you currently using the ORS for submissions to OFAC of initial and annual blocked property reports and rejected transaction reports?

Will you be able to update the your OFAC Sanctions compliance program and procedures to administer reporting requirements as per the OFAC RPPR Interim Final Rule?