The Reporting, Procedures and Penalties Regulations (RPPR) is a queer duck (it's an expression – get used to it). It has three distinct, albeit loosely related sections: reporting and recordkeeping, general rules and procedures for changes made to sanctions regimes, and penalties under the Trading with the Enemy Act (TWEA), which is now only applicable to the Cuban sanctions program.

Since these regs are disjointed, it makes sense to deal with each piece separately. So, this is what the RPPR says about reporting and recordkeeping:

• “Full and accurate” records must be kept for all transactions that run afoul of economic sanctions programs, even if the transaction is ultimately permitted (e.g. under a general or specific license), and made available on request, for at least 5 years. So, if an item matches a name on the SDN list or would, absent a license or an exemption in the current sanctions program, information about it needs to be retained. While it is not explicit on this point, Mr. Watchlist would find it prudent to err on the side of caution – if a personal remittance is permitted by a General License, it would make sense to retain record of that item. When one considers the rapid pace of change in the Iran, Iraq, North Korea, and Burma sanctions programs, having the data at hand for regulators would see wise.
• Similarly, records for all blocked property must be retained for at least 5 years after it is unblocked.
• Reports on any transactions, including any supporting documentation, are to provided on demand, whether or not the transaction has been completed, for any transaction that is subject to sanctions scrutiny, regardless of potential licensure, etc. OFAC's Director is empowered with all investigative powers, including “conduct investigations, hold hearings, administer oaths, examine witnesses, receive evidence, take depositions, and require by subpoena the attendance and testimony of witnesses and the production of all books, papers, and documents relating to any matter under investigation, re- gardless of whether any report has been required or filed in connection therewith.”
• Blocked property reports are to be filed both on the initial blocking, and on an annual basis. While a third party agent may actually file the report, it is the responsibility of the actual property holder.
• The initial blocked property report must be filed within 10 days of the property being blocked. The report must contain:
• The property owner
• A description of the property and its location
• Any account or reference number for the property
• Property value (actual or estimated)
• Date property as blocked
• Name and address of the current property holder (who is blocking the property), as well as a name and telephone number of a contact person.
• If a financial institution is filing the report for a blocked funds transfer, a photocopy of the payment or transfer instructions received must also be included. The financial institution must also confirm that funds have been deposited into a blocked account that clearly identifies the subject causing the funds to be blocked.

 

• Annual blocked property reports must be filed by September 30 of each year using form TDF 90-22.50
• If funds were blocked by a financial institution under 1 CFR 596.504(b) (payments to a government supporting international terrorism), the account name has to show the name of the person, entity, etc. causing the funds to be blocked.
• If a funds transfer is rejected by a financial institution, it must be reported within 10 days. The report must include “name and address of the transferee financial institution, the date of the transfer, the amount of the payment transfer, and a photocopy of the payment or transfer instructions received, and shall state the basis for the rejection of the transfer instructions. The report shall also provide the name and telephone number of a contact person at the transferee financial institution”
• US persons who start litigation, arbitration or other dispute resolution proceedings against persons who have blocked property must:
• Provide notice of the proceedings when they are commenced
• Submit all court documents (“pleadings, motions, memoranda, exhibits, stipula- tions, correspondence, and proposed or- ders or judgments (including any pro- posed final judgment or default judg- ment) submitted to the court or other adjudicatory body, and all orders, deci- sions, opinions, or memoranda issued by the court”) to OFAC's Chief Counsel within 10 days of their issuance. Items not subject to this requirement include “discovery requests or responses, documents filed under seal, or requests for procedural action not seeking action dispositive of the proceedings (such as requests for extension of time to file)”.
• Immediately report to OFAC's Chief Counsel by FAX the scheduling of any hearings or conferences when it appears that a judgment or court order may be issued
• Notify the court of the restrictions on the proceedings due to the property being blocked (attachments, liens and garnishments and the like being prohibited, for example).

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Categories: Sanctions Regulations

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