Reporting, Procedures and Penalties Regulations

<RULE> DEPARTMENT OF THE TREASURY <SUBAGY>Office of Foreign Assets Control</SUBAGY> <CFR>31 CFR Parts 501 and 515</CFR> <SUBJECT>Reporting, Procedures and Penalties Regulations</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Foreign Assets Control, Treasury. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing this final rule to adopt, without change, an interim final rule to amend the Reporting, Procedures and Penalties Regulations (the “Regulations”), extending certain recordkeeping requirements from five to 10 years, consistent with the statute of limitations for violations of certain sanctions administered by OFAC. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective March 21, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Assistant Director for Licensing, 202-622-4570; Assistant Director for Regulatory Affairs, 202-622-4855; Assistant Director for Compliance, 202-622-2490 or <E T="03">https://ofac.treasury.gov/contact-ofac.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> 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 <E T="03">et seq.</E> (IEEPA), and the Trading with the Enemy Act, 50 U.S.C. 4301 <E T="03">et seq.</E> (TWEA). On September 13, 2024, OFAC published an interim final rule (89 FR 74832, September 13, 2024) with a 30-day public comment period to solicit public comments on amending the Regulations to extend from five to 10 years the recordkeeping requirements codified at 31 CFR 501.601, paragraph IV.B of appendix A to part 501, and 515.572, consistent with the statute of limitations for violations of certain sanctions prohibitions administered by OFAC. OFAC received three relevant written submissions on the proposed rule, which are available on the public rulemaking docket at <E T="03">https://www.regulations.gov.</E> OFAC considered each submission but made no revisions in this rule in response to the comments. The first comment was general in nature, for example, supporting OFAC's efforts to extend recordkeeping requirements for certain transactions from five to 10 years, consistent with the statute of limitations for violations of certain sanctions administered by OFAC. That comment also stated that the rule has a broad scope and sought additional guidance on the applicability of the rule. The second comment suggested that OFAC postpone enacting the new recordkeeping requirements to give stakeholders more time to acquire additional resources and storage capacity and to adjust their current recordkeeping practices to conform to the new recordkeeping requirements of OFAC. However, OFAC believes that it has provided sufficient time for recordkeepers to adjust because the relevant statute was signed into law in April 2024, and OFAC published the interim final rule with a six-month delay in effective date (March 12, 2025). Finally, the third comment noted that financial institutions subject to European Union (EU) regulations on anti-money laundering and counter-terrorism financing may face difficulties in complying with this new 10-year recordkeeping requirement. Specifically, the comment states that article 40 of EU Directive 2015/849, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, mandates that records of transactions must be deleted five years after the end of a business relationship with regular clients, or after the transaction for occasional clients, because this data is considered “personal” by EU authorities. OFAC is mindful that this may 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. <E T="03">See</E> 74 FR 57593. Based on the rationale set forth in the interim final rule and this final rule, OFAC is adopting the interim final rule with no changes. <HD SOURCE="HD1">Electronic Availability</HD> This document and additional information concerning OFAC are available on OFAC's website: <E T="03">https://ofac.treasury.gov.</E> <HD SOURCE="HD1">Public Participation</HD> 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. <HD SOURCE="HD1">Paperwork Reduction Act</HD> 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. On September 12, 2024, OFAC issued a <E T="04">Federal Register</E> notice and requests for comments on this information collection, as well as an unrelated consolidation of certain OFAC information collections under OMB control number 1505-0164, and received no public comments. The request has been submitted to OMB for review. 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. <LSTSUB> <HD SOURCE="HED">List of Subjects</HD> <CFR>31 CFR Part 501</CFR> Administrative practice and procedure, Banks, Banking, Exports, Foreign trade, Licensing and registration, Penalties, Reporting and recordkeeping requirements. <CFR>31 CFR Part 515</CFR> Administrative practice and procedure, Banks, Banking, Cuba, Exports, Foreign trade, Imports, Licensing and registration, Penalties, Reporting and recordkeeping requirements. </LSTSUB> <HD SOURCE="HED">PART 501—REPORTING, PROCEDURES AND PENALTIES REGULATIONS</HD> <HD SOURCE="HED">PART 515—CUBAN ASSETS CONTROL REGULATIONS</HD> <REGTEXT TITLE="31" PART="515"> Accordingly, the interim final rule amending 31 CFR parts 501 and 515 published at 89 FR 74832 on September 13, 2024, is adopted as final without change. </REGTEXT> <SIG> <NAME>Lisa M. Palluconi,</NAME> Acting Director, Office of Foreign Assets Control. </SIG> </SUPLINF> <FRDOC>[FR Doc. 2025-04864 Filed 3-19-25; 8:45 am]</FRDOC> </RULE>