The US sanctions landscape continues to create complex risk management hurdles. In May, the US Treasury’s Office of Foreign Assets Control (OFAC) issued its most prescriptive guidance on sanctions compliance. That clarity was much-needed for OFAC, historically an enforcement agency, has provided limited prescriptive guidance itself. OFAC has imposed penalties over $1-billion for sanctions violations just this year alone. But any relief companies felt proved to be short-lived.
In a seemingly technical update on June 21, 2019, OFAC significantly expanded the scope of sanctions reporting requirements. The new rules are sweeping. Previously, U.S. entities were required to file reports when a transaction was "blocked," or put into frozen accounts due to a direct connection with persons on OFAC’s Specially Designated Nationals list. Now even “rejected” transactions have to be reported. The reporting requirement has broadened in two ways: