On September 11, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) published an Interim Final Rule (IFR) to amend its Reporting, Procedures and Penalties Regulations under 31 CFR Part 501, which extends recordkeeping requirements for certain transactions from five years to 10 years. 

Unless the IFR is modified as part of that public comment process, the new requirements set out in the IFR will take effect on March 12, 2025.

Statute of limitations

The IFR follows the April amendments to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). These extended the statute of limitations for violations of most of OFAC’s sanctions programs from five to 10 years when President Biden signed into law the 21st Century Peace through Strength Act.

In parallel, the IFR now seeks to lengthen OFAC’s recordkeeping requirements.

The new 10-year statute of limitations provision applies to any violation that was not time-barred at the time of its enactment, meaning OFAC may now start an enforcement action for any transaction completed subject to IEEPA or TWEA if the transaction occurred after April 24, 2019.

Of course, the recordkeeping amendment is just an interim rule at this stage, and OFAC is accepting public comment on the provisional change.

Resistance

The recordkeeping changes could face some pushback.

The American Bankers Association asked OFAC in June to provide advance notice of the changes implemented by the IFR, “given that current bank policies, procedures, and operations are all developed in reliance on the current minimum five-year standard.” 

Institutions subject to the rule, if enacted, would obviously need to adjust policies and implement new procedural, administrative and technological capabilities around the record-retention mandate, which obviously concerns them from a cost and resources required perspective.