On September 11, 2024, the Department of the Treasury's Office of Foreign Assets Control (OFAC) issued an Interim Final Rule (the IFR), effective March 12, 2025, that extends OFAC's general recordkeeping requirement from five years to 10 years. The IFR aligns OFAC's recordkeeping requirement with the recent extension of the statute of limitations (SOL) period for civil and criminal violations of the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA), which took effect on April 24, 2024, when President Biden signed into law HR 815, the National Security Supplemental (discussed here).
OFAC previewed the change in the IFR on July 22, 2024, by issuing guidance on the aforementioned SOL extension. The IFR is consistent with what OFAC had previewed, but is not effective for approximately six months. Any parties with comments on the IFR must submit them to OFAC by October 15, 2024.
Amendments to OFAC's Recordkeeping Requirements
OFAC has long required persons to maintain full and accurate records of transactions subject to its regulations, including those involving prohibited or licensed transfers and blocked property. The IFR has now changed the general required recordkeeping period from five years to 10 years.
OFAC's recordkeeping requirements are very broad on the face of the regulations, covering "every person engaging in any transaction subject to" its regulations. For some companies, this 10-year recordkeeping obligation may present considerable practical and financial burdens.
It is important to note that the 10-year period starts "after the date of [the] transaction," meaning the actual recordkeeping period may sometimes exceed 10 years. For blocked property, the 10-year clock only begins to run once the property is unblocked. So, in the context of blocked property the recordkeeping requirement can in effect be indefinite in certain instances.
The IFR also amends the Cuban Assets Control Regulations (CACR), specifically, 31 CFR Part 515.572(b)(1), to require persons subject to US jurisdiction providing services pursuant to one of the general licenses under Part 515.572(a) ("travel, carrier, other transportation-related, and remittance forwarding services") to retain for at least 10 years from the date of the transaction a certification from each customer regarding compliance with the general license.
Additionally, the IFR amends OFAC's Economic Sanctions Enforcement Guidelines (Appendix A to 31 CFR Part 501) to reflect the fact that civil monetary penalties may be imposed for late filing of a required report based on the type of report and how long it is overdue. For reports relating to blocked assets, the penalty may include an additional amount for every 30 days the report is overdue, up to 10 years.
Implications for the Enforcement Landscape
While not unexpected given OFAC's earlier guidance, the change in OFAC's recordkeeping requirement presents a challenge for businesses with compliance programs built around the previous five-year retention period. Programs will need to adapt in order to comply with this new requirement before the IFR enters into force. Furthermore, the separate extension of the statute of limitations to 10 years for violations of IEEPA and TWEA underscores the need to maintain records for the minimum 10-year period, since such records may be needed for purposes of (a) submitting a voluntary self-disclosure to OFAC and/or (b) responding to a Request for Information, subpoena, or proposed charging letter (see the aforementioned guidance on the SOL extension).
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