OFAC's 10 Year Record Retention Requirement Begins on March 12th

As we reported last year, the Office of Foreign Assets Control (OFAC) issued an interim final rule to increase the record retention period for OFAC records from 5 years to 10 years, beginning on March 12, 2025.

Amendments to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) extended the statute of limitations for violations of most U.S. sanctions programs from 5 to 10 years. As a result, OFAC extended its record retention period to reflect these changes.

Note that the only thing changing in 31 CFR 501.601 is the number of years – from 5 to 10; no additional recordkeeping requirements were added to this section of OFAC’s regulations. The revised regulatory text will read as follows:

31 CFR 501.601: Records and recordkeeping requirements.

Except as otherwise provided, every person engaging in any transaction subject to the provisions of this chapter shall keep a full and accurate record of each such transaction engaged in, regardless of whether such transaction is effected pursuant to license or otherwise, and such record shall be available for examination for at least 10 years after the date of such transaction. Except as otherwise provided, every person holding property blocked pursuant to the provisions of this chapter or funds transfers retained pursuant to § 596.504(b) of this chapter shall keep a full and accurate record of such property, and such record shall be available for examination for the period of time that such property is blocked and for at least 10 years after the date such property is unblocked.

Translation: according to the current FFIEC BSA/AML Examination Manual, credit unions “must keep a full and accurate record of each rejected transaction for at least five years after the date of the transaction. For blocked property (including blocked transactions), records must be maintained for the period the property is blocked and for five years after the date the property is unblocked.” That “5 years” will increase to “10 years” on March 12th.

The FFIEC Manual also states that credit unions should “maintain documentation of its OFAC checks on new accounts, the existing customer base and specific transactions,” reflecting examiners’ expectation that institutions have documented policies, procedures, and processes in place for screening transactions, reporting blocked and rejected transactions to OFAC, and maintaining blocked property in accordance with OFAC regulations.

Is there any chance the effective date will be extended? These changes were issued as an interim final rule, so OFAC could amend the IFR in response to public comments and/or extend the effective date. However, this has not occurred to date, even in light of the Trump Administration’s regulatory freeze. We’ll certainly let credit unions know if any extension is announced.

Lastly, OFAC launched a new File Finder application for use on the agency’s website. This browser-based application is intended to help users “efficiently navigate” all of OFAC's website content, including general licenses, Federal Register notices, Executive Orders, advisories, and other records.

Questions? Suggestions for future blog posts? Please reach out to the Compliance Team at compliance@americascreditunions.org.