2024-20674. Reporting, Procedures and Penalties

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Department of the Treasury

Office of Foreign Assets Control

1. 31 CFR Part 501

AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Interim final rule; request for comments.

SUMMARY:

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing this interim final rule to amend the Reporting, Procedures and Penalties Regulations (the “Regulations”), extending recordkeeping requirements for certain transactions from five to 10 years, consistent with the statute of limitations ( print page 74833) for violations of certain sanctions administered by the Office of Foreign Assets Control (OFAC).

DATES:

Effective date: This interim final rule is effective March 12, 2025.

Comments due date: Written comments may be submitted on or before October 15, 2024.

ADDRESSES:

You may submit comments via the following methods, electronic is preferred:

Federal eRulemaking Portal: www.regulations.gov. Follow the instructions on the website for submitting comments. Refer to Docket Number OFAC-2024-0004.

Mail: Office of Foreign Assets Control, U.S. Department of the Treasury, Treasury Annex/Freedman's Bank Building, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Refer to Docket Number OFAC-2024-0004.

Instructions: All submissions received must include the agency name and the Federal Register Doc. number that appears at the end of this document. All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments generally will not be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT:

Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 202-622-4855; Assistant Director for Compliance, 202-622-2490 or https://ofac.treasury.gov/​contact-ofac.

SUPPLEMENTARY INFORMATION:

Background

On April 24, 2024, the President signed into law the 21st Century Peace through Strength Act, Public Law 118-50, div. D (the “Act”). Section 3111 of the Act extended from five years to 10 years the statute of limitations for civil and criminal violations of the International Emergency Economic Powers Act, 50 U.S.C. 1701 et seq. (IEEPA), and the Trading with the Enemy Act, 50 U.S.C. 4301 et seq. (TWEA). Prior to the Act's enactment, civil enforcement actions brought by OFAC under IEEPA or TWEA were subject to the five-year statute of limitations set forth in 28 U.S.C. 2462. The new 10-year statute of limitations—codified at 50 U.S.C. 1705(d) and 4315(d)—became effective upon the President's signature of the Act on April 24, 2024. This new 10-year statute of limitations applies to any violation that was not time-barred at the time of its enactment. Consequently, OFAC may now commence an enforcement action for civil violations of IEEPA- or TWEA-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019. As set forth in the Act, the commencement of a civil enforcement action includes the issuance of a pre-penalty notice or a finding of violation.

To match the new statute of limitations period, OFAC is publishing this interim final rule extending from five years to 10 years the recordkeeping requirements codified at 31 CFR 501.601, paragraph IV.B of appendix A to part 501, and 515.572. OFAC is soliciting public comments for 30 days on this interim final rule.

Electronic Availability

This document and additional information concerning OFAC are available on OFAC's website: https://ofac.treasury.gov.

Public Participation

Because the amendment of the Regulations is a rule of agency procedure and involves a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), as amended, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the collections of information related to 31 CFR 501.601, paragraph IV.B of appendix A to part 501, and 515.572 have been previously approved by the Office of Management and Budget (OMB) under control number 1505-0164. This final rule modifies the requirements for recordkeeping under these sections by increasing the period for recordkeeping to 10 years from five years to align with a statutory amendment. This modification to this collection of information, as well as an unrelated consolidation of certain OFAC information collections, will be submitted to OMB for review under control number 1505-0164. Written comments and recommendations for the modified collection can be submitted by visiting https://www.reginfo.gov/​public/​do/​PRAMain. Find this document by selecting “Currently Under Review—Open for Public Comments” or by using the search function. Comments are welcome and must be received by November 13, 2024.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number. The likely filers and record-keepers affected by these collections of information contained in 31 CFR part 501 are financial institutions, business organizations, nonprofit organizations, individuals, households, non-governmental organizations, and legal representatives.

The burden of the recordkeeping requirement imposed by this rule is minimal because the records required to be maintained are likely maintained under standard business practice. The recent increase in the recordkeeping period to 10 years from five years could impose a temporary incremental burden on recordkeepers while they update their recordkeeping practices and adjust storage requirements to maintain records for a longer period of time. Accordingly, the total burden for this collection is estimated to be:

Estimated Number of Respondents: 2,505,086.

Frequency of Response: When requested by OFAC.

Estimated Total Number of Annual Responses: 2,505,086.

Estimated Time per Response: No additional time to retain records for additional time.

Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services required to provide information.

List of Subjects in 31 CFR Part 501

• Administrative practice and procedure
• Banks
• Banking
• Exports
• Foreign trade
• Licensing and registration
• Penalties
• Reporting and recordkeeping requirements

For the reasons set forth in the preamble, OFAC amends 31 CFR parts 501 and 515 as follows:

( print page 74834)

PART 501—REPORTING, PROCEDURES AND PENALTIES REGULATIONS

1. The authority citation for part 501 continues to read as follows:

Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, 2339B; 19 U.S.C. 3901-3913; 21 U.S.C. 1901-1908; 22 U.S.C. 287c, 2370(a), 6009, 6032, 7205, 8501-8551; 31 U.S.C. 321(b); 50 U.S.C. 1701 et seq., 4301-4341; Pub. L. 101-410, 104 Stat. 890, as amended (28 U.S.C. 2461 note).

Subpart C—Reports

2. Revise and republish § 501.601 to read as follows:

§ 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.

3. Revise paragraph IV.B of appendix A to part 501 to read as follows:

Appendix A to Part 501—Economic Sanctions Enforcement Guidelines

* * * * *

IV. * * *

B. The late filing of a required report, whether set forth in regulations or in a specific license, may result in a civil monetary penalty in an amount up to $3,550, if filed within the first 30 days after the report is due, and a penalty in an amount up to $7,104 if filed more than 30 days after the report is due. If the report relates to blocked assets, the penalty may include an additional $1,422 for every 30 days that the report is overdue, up to 10 years.

* * * * *

PART 515—CUBAN ASSETS CONTROL REGULATIONS

4. The authority citation for part 515 continues to read as follows:

Authority: 22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. 4301 et seq.; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); 22 U.S.C. 6021-6091; Pub. L. 105-277, 112 Stat. 2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-117, 123 Stat. 3034; E.O. 9989, 13 FR 4891, 3 CFR, 1943-1948 Comp., p. 748; Proc. 3447, 27 FR 1085, 3 CFR, 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 614.

5. Revise and republish paragraph (b)(1) of § 515.572 as follows:

§ 515.572

Provision of travel, carrier, other transportation-related, and remittance forwarding services.

* * * * *

(b) * * *

(1) Persons subject to U.S. jurisdiction providing services authorized pursuant to paragraphs (a)(1) through (4) of this section must retain for at least 10 years from the date of the transaction a certification from each customer indicating the section of this part that authorizes the person to travel or send remittances to Cuba. In the case of a customer traveling under a specific license, the specific license number or a copy of the license must be maintained on file with the person subject to U.S. jurisdiction providing services authorized pursuant to this section.

* * * * *

Lisa M. Palluconi,

Acting Director, Office of Foreign Assets Control.