OFAC updated several FAQs related to Blocking and Rejecting Transactions and Filing Reports with OFAC. The revisions provide additional guidance for financial institutions in three key areas.
Blocking vs. Rejecting Transactions
- Clarifies when a financial institution must block (freeze) funds because a sanctioned person has an ownership interest in the property.
- Distinguishes situations where a transaction should be rejected rather than blocked because no blocked party has a property interest in the transaction.
Reporting and Recordkeeping Requirements
- Reinforces the requirement to report blocked property and rejected transactions within 10 business days.
- Provides additional guidance on required supporting documentation and reporting procedures.
- Clarifies annual reporting obligations for blocked property held by financial institutions.
Operational Procedures
- Addresses administration of blocked accounts, including treatment of interest accruals and permissible service charges.
- Clarifies customer notification expectations when transactions are blocked or rejected.
- Explains the difference between a customer merely inquiring about a potentially prohibited transaction and actually instructing the bank to process one.
The updated Blocking and Rejecting Transactions FAQs are available here.
The updated Filing Reports with OFAC FAQs are available here.
CCI recommends sharing this update with your AML/CFT Officer and staff responsible for OFAC. For additional information or assistance, please don’t hesitate to connect with our team at inquiries@completecompli.com.