In comments today, the American Bankers Association said that while it appreciates recent updates to Office of Foreign Assets Control reporting requirements related to blocked and rejected transactions, further revisions are needed to ease the compliance burden on banks.
OFAC in May published an interim final rule amending its reporting and penalties regulations. Among the changes, OFAC created a specific “compliance release” procedure for banks to follow to apply for the release of certain funds blocked and reported to the office due to mistake. It also officially mandated the use of the electronic OFAC Reporting System. In its comments, ABA suggested OFAC establish a deadline by which it will respond to compliance release requests, such as 30 days from an electronic request. It also encouraged OFAC to publish FAQs related to the new procedure to clarify the nature of mistakes eligible for streamlined relief.
With the switch to a mandatory reporting system, ABA said OFAC should explore reporting efficiencies to ease the burden on banks, such as clarifying that reports are not required when banks transfer blocked funds or property within the same bank enterprise, or unblocking due to delisting or program termination. The association also said that a new standard to require reports every time funds are unblocked “creates unnecessary burden, requires irrelevant reports in which OFAC has already declined interest, and potentially limits OFAC’s licensing discretion.” Finally, ABA urged OFAC to publish advance notice of any changes to its timeline for revising recordkeeping requirements in light of a new law that extends the statute of limitations for OFAC sanctions violations from five to 10 years.
