We are excited to announce that three of the faculty members at GBA Compliance school are our very own.  Stewart Thigpen, CPA, Brad Washburn, CRCM, CAMS, and James Moore, CRCM are teaching classes this year.  This is a great way to learn the ins and outs of bank compliance requirements!  We hope to see you there!

Click here for registration:
Summary - GBA Compliance School (2025 Session)

Authors: Jeremy Clifton CRCM, CAMS & Nick Milcarek, CAMS

On July 22, 2024, the Office of Foreign Assets Control released guidance on the extension of the statute of limitations specifically involving OFAC record keeping requirements. Beginning March 12, 2025, the interim final rule will extend recordkeeping requirements from 5 to 10 years. This comes after the prior administration signed into law the 21st Century Peace Through Strength Act. Section 3111 of the law specifically states that the statute of limitations on sanctions violations be extended to 10 years under the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TEA).

Section 501.601 of the Department of Treasury’s rules now reads:

“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.”

What does this mean for financial institutions? It clearly indicates that any transaction subject to sanctions blocking or rejecting will now need to be retained for a minimum of 10 years. Most community financial institutions have historically had little if any experience or need to block or reject transactions as true sanctions matches are very rare.

What does this mean for non-match OFAC or sanctions documentation? This is not as clear as we would have hoped at this time; keep in mind this is an interim final rule with comments and a final rule to come.  With the statute of limitations being 10 years and with the ambiguity of the section “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”, we are recommending a wait and see approach at this time. If your institution has non-match OFAC records after April 24, 2019, we recommend that they continue to be maintained for the interim.  We will keep you updated on any changes.

For more information and guidance on the new OFAC requirements, please see the below links.

Guidance from OFAC: extension_statute_of_limitations_guidance_20240722.pdf

Federal Register Mentioning OFAC Changes:
ttps://www.federalregister.gov/documents/2024/09/13/2024-20674/reporting-procedures-and-penalties
 

Author: Nick Milcarek, CAMS

With the recent decision by the U.S District court of the Eastern District of Texas in Smith v. U.S. Department of the Treasury, the beneficial ownership requirements enacted by the Corporate Transparency Act (CTA) are once again back in effect. The original deadline for this ruling was February 19, 2025, for businesses, but has been extended to March 21, 2025. FinCEN noted that it will consider extending the deadline for entities that do not pose a significant national security risk. Many local, small businesses across the U.S. are likely to fall into this category.

As a best practice, banks should remind their customers of these deadlines to file, though banks are not required to file for them.
 
Please see the attached 2/18/2025 FinCEN release below:
FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf