OFAC Finalizes Extension of Sanctions Recordkeeping Timeline to 10 Years
The Office of Foreign Assets Control this week finalized a rule to extend the agency’s sanctions-related recordkeeping requirements from five years to 10 years, aligning those rules with a similar expansion of the statute of limitations for civil and criminal violations of U.S. sanctions (see 2407220022 and 2404290071). The changes, outlined in an interim final rule published in September (see 2409110017), take effect March 21.
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The agency said it was asked by at least one commenter to delay the recordkeeping rules to give industry more time to “acquire additional resources and storage capacity and to adjust their current recordkeeping practices to conform to the new recordkeeping requirements.” OFAC said it believes it has “provided sufficient time for recordkeepers to adjust,” noting that it published the interim final rule last year with a six-month delay.
Another commenter told OFAC that the recordkeeping changes could create challenges for financial institutions that must comply with EU anti-money laundering regulations and counterterrorism financing rules, noting that certain records of transactions under those rules must be deleted five years “after the end of a business relationship with regular clients, or after the transaction for occasional clients.” OFAC said it’s aware this could “create instances in which there is potential tension between EU and U.S. retention requirements and has accounted for potential conflict of laws issues in assessing apparent violations in General Factor K of OFAC’s Enforcement Guidelines.”