Criminal Defense Lawyers

Reporting Blocked Assets to OFAC as Required

Dealing with blocked assets can be a tricky situation for many companies and individuals. The Office of Foreign Assets Control (OFAC) requires that any blocked assets be reported in a timely manner. While the reporting process may seem daunting, having a solid understanding of the requirements and procedures can help ensure proper compliance.

This article will provide a helpful, conversational overview of what’s involved in reporting blocked assets to OFAC. We’ll cover the key regulations, reporting timelines, methods for submission, and tips for staying compliant. Our goal is to simplify the complex legal jargon and provide some practical guidance for meeting OFAC’s expectations.

What is a Blocked Asset?

First, let’s make sure we’re all on the same page about what constitutes a blocked asset. According to OFAC, “A blocked asset is any property or property interest that has been seized or frozen pursuant to one of OFAC’s sanctions programs.”¹

In other words, if an individual, entity, or country on OFAC’s Specially Designated Nationals (SDN) list has an interest in an asset, that asset must be blocked from use. This prevents sanctioned parties from accessing the U.S. financial system or benefiting from their assets in any way.

Some examples of blocked assets include:

• Funds transfers or trade transactions with an SDN that are halted
• Real estate or physical property owned by an SDN
• Shares in a company majority-owned by an SDN

The bottom line is that if you come across any property fitting OFAC’s definition of a blocked asset, it must be reported.

Requirements for Reporting Blocked Assets

OFAC’s regulations around reporting blocked assets are outlined in the Code of Federal Regulations, specifically in 31 CFR 501 Subpart F. Here are some key aspects of the requirements:²

• Must report within 10 business days of blocking
• Annual report of all blocked assets due by September 30 each year
• Use form TD F 90-22.50 for the annual report
• Submit reports electronically via the OFAC Reporting System (ORS)

That covers the basic who, what, when, and how. But we’ll break it down further in the sections below.

Reporting Timeline

The 10-day timeline for reporting newly blocked assets is strict. As soon as you block a transaction or asset as required by OFAC, start the clock ticking. You need to have your report submitted within 10 business days. Don’t wait until day 10 though! Submit the report as soon as you have the information together to avoid a last-minute scramble.

For the annual report, the deadline is September 30. Mark your calendars and set a reminder to start compiling your full list of blocked assets a few weeks ahead of time. You’ll need to pull information from your records on all blocked assets held throughout the past year, so give yourself enough lead time.

What to Report

Your initial report on a newly blocked asset should include as much identifying information as possible. For example:

• Full name and address of owner
• Description of asset (e.g. real estate, bank account)
• Identifying number or account details
• Location
• Value
• Date blocked

For the comprehensive annual report, you’ll need to provide similar information on all blocked assets held at any point during the reporting period of July 1 to June 30.

How to Submit Reports

OFAC strongly encourages electronic submission of blocked asset reports through their OFAC Reporting System (ORS). This streamlined reporting portal allows you to register, save report templates, and securely submit your reports to OFAC.³

If the ORS is temporarily unavailable, you can download reporting forms from OFAC’s website and email them to OFACReport@treasury.gov. However, when possible it’s best to use the ORS to ensure your report is quickly received and processed.

Tips for Staying Compliant

Following OFAC’s reporting rules for blocked assets is essential for staying compliant and avoiding penalties. Here are some tips to help the process go smoothly:

• Designate a point person to coordinate reporting
• Document your OFAC screening process
• Train staff on handling potential blocked assets
• Consult OFAC’s FAQs if you’re unsure about an asset
• Keep detailed records of all blocked assets and reporting

Having solid processes in place makes it much easier to assemble the required reporting on time. Training your team and keeping everyone up-to-date on the latest OFAC requirements is key.

If you ever have a question about whether an asset requires blocking or how to report it, don’t hesitate to call OFAC’s hotline at 1-800-540-6322. The representatives can provide guidance on your specific situation.

In Closing

We covered a lot of ground on the intricacies of OFAC reporting for blocked assets. The main takeaways are:

• Know what constitutes a blocked asset
• Report within 10 days of blocking and annually by September 30
• Use OFAC’s online reporting system for electronic submission
• Provide detailed information on each blocked asset
• Keep meticulous records to simplify reporting
• Consult OFAC’s guidance materials and hotline as needed

Reporting blocked assets properly is crucial for organizations of all sizes. While the process can seem complex, having the right knowledge and procedures makes meeting OFAC’s requirements very manageable. We hope this overview has provided some useful insight into successfully navigating blocked asset reporting.

The penalties for non-compliance can be severe, so it’s important to stay up-to-date on the rules and deadlines. With a methodical approach and attention to detail, your organization can feel confident in fulfilling its OFAC reporting obligations. Don’t hesitate to reach out to OFAC or legal counsel if you need guidance tailored to your unique situation.

References

1. OFAC FAQ 15

2. 31 CFR 501 Subpart F

3. OFAC Reporting System