OFAC to Extend Required Recordkeeping Timelines in March

The Office of Foreign Assets Control unveiled an interim final rule this week that will extend the agency’s sanctions-related record-keeping requirements from five years to 10 years. The rule, effective in mid-March, will align the agency’s record-keeping rules with a similar expansion of the statute of limitations for civil and criminal violations of U.S. sanctions as part of a bill passed by Congress and signed into law earlier this year (see 2407220022 and 2404290071).

The new record-keeping requirements, along with the expanded statute of limitations for sanctions violations, apply to enforcement actions OFAC takes under the International Emergency Economic Powers Act or the Trading with the Enemy Act, as long as the violations were not “time-barred at the time of its enactment,” the agency said.

OFAC said the new statute of limitations allows it to begin enforcement actions “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.” Those enforcement actions can include pre-penalty notices or a “finding of violation.”

OFAC said the record-keeping change “could impose a temporary incremental burden on recordkeepers while they update their recordkeeping practices and adjust storage requirements to maintain records for a longer period of time.”

The notice said a late filing could lead to a $3,550 penalty if filed within the first 30 days after the report is due, and a $7,104 penalty if filed more than 30 days after the report is due. If the report involves blocked assets, the penalty may include an additional $1,422 for every 30 days the report is overdue, up to 10 years.

The agency is accepting public comments on the change until Oct. 15.