OFAC to Expand Recordkeeping Requirements to 10 Years

The Office of Foreign Assets Control plans to extend its sanctions-related recordkeeping requirements to match a similar expansion of the U.S. statute of limitations for sanctions violations that was signed into law earlier this year (see 2404290071).

In new guidance published July 22, OFAC said it plans to soon publish an interim final rule to extend its recordkeeping requirements from five to 10 years. Those requirements, outlined in 31 C.F.R. § 501.601, currently calls on parties to keep records of certain blocked property-related transactions or holdings for the entire “period of time that such property is blocked and for at least 5 years after the date such property is unblocked.”

OFAC said it expects the new 10-year recordkeeping requirement will “become effective six months after publication of the interim final rule.”

The change would align the agency’s recordkeeping rules with a provision in the wide-ranging national security bill that President Joe Biden signed in April (see 2404240043). That bill amended Section 206 of the International Emergency Economic Powers Act and Section 16 of the Trading with the Enemy Act by extending the statute of limitations for sanctions violations from five to 10 years "after the latest date of the violation upon which the civil fine, penalty, or forfeiture is based.”

In the guidance released this week, OFAC said the new 10-year statute of limitations “applies to any violation that was not time-barred at the time of” the bill’s enactment. “Consequently, OFAC may now commence an enforcement action for civil violations of IEEPA- or TWEA-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019,” the agency said, adding that an enforcement action can include a pre-penalty notice or a finding of violation.