On June 21, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”)(1) issued an interim final rule(2) that included, among others, new requirements for all US Persons to file reports on rejected transactions. In the past the requirement to report on rejected transactions only applied to financial institutions that rejected a “funds transfer” where processing the transaction may violate OFAC’s rules.
Reports on Rejected Transactions
The rule revises § 501.604(3) to:
Clarify that the section applies to all rejected transactions (not only to rejected funds transfers)
OFAC replaced references to “rejected fund transfers” with references to “rejected transactions” and added a definition for the term “transactions”
The term transaction includes transactions related to wire transfers, trade finance, securities, checks, foreign exchange, and goods or services(3);
Provide additional details around the information that should be provided to OFAC in connection with reports on rejected transactions;
Provide guidance on where/how to report the information on rejected transactions; and
Make other technical and conforming changes.
Revising § 501.603(4) to provide more detail regarding information to be reported in connection with blocking reports;
Revising § 501.801(5) to include information regarding OFAC’s electronic license application procedures; and
The interim final rule was effective on June 21, 2019 and comments were allowed to be submitted until July 22, 2019.