Frequently Asked Questions

36. I understand blocking a transaction, but what is meant by rejecting a transaction? When should a transaction be rejected rather than blocked?

In some cases, an underlying transaction may be prohibited, but there is no blockable interest (i.e., that of a Specially Designated National (SDN) or blocked person or government) in the transaction. In these cases, the transaction is simply rejected, or not processed and returned to the… Read more

10. What jurisdictions or countries are sanctioned by the United States?

OFAC implements, administers, and enforces U.S. sanctions across many jurisdictions. Some of these sanctions are comprehensive in nature and broadly prohibit most transactions involving the particular jurisdiction and may also include blocking restrictions on the government of such jurisdiction.… Read more

42. What do I do if a person tries to open an account and the individual or entity’s name is on OFAC’s SDN List (or is otherwise a blocked person)? Do I open the account and then block the funds?

A U.S. financial institution, its foreign branches, and — in some cases — its wholly-owned or -controlled foreign subsidiaries, cannot open an account for a person named on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) or a person who is otherwise blocked (e.g., a… Read more

53. How do I differentiate between an "inquiry" and a "payment instruction" when a customer wants to send a wire transfer to a sanctioned party or country?

In those programs with blocking provisions, OFAC's regulations block all "property" in which a target has an interest. The term "property" is very broadly defined, including present, future or contingent interests. In the case of a wire transfer, the bank will be holding blocked property upon the… Read more

32. How do I block an account or a funds transfer?

Once it has been determined that funds need to be blocked, they must be placed into an interest-bearing account on your books from which only OFAC-authorized debits may be made. The blocking also must be reported to OFAC Compliance within 10 business days. Some banks have opted to open separate… Read more

35. Do all OFAC programs involve blocking transactions?

No. OFAC regulations are tailored to further the requirements and purposes of specific Executive Orders or statutes which provide the basic outline of each program. In some cases, the President has determined that a comprehensive asset freeze is appropriate, and in others the President has… Read more

49. If I reject or block a transaction, when do I have to report the action to OFAC? How do I submit the report?

31 C.F.R. Parts 501.603 and 501.604 require blocking and reject reports to be submitted to OFAC within 10 business days of the date of the action. Optional reporting forms are available at this link and complete information may be emailed to OFAC's Sanctions Compliance and Evaluation Division at … Read more

50. Is there a requirement for annual reporting of blocked property? Is there a required format?

Yes. A report of blocked property is to be submitted annually by September 30 to OFAC Compliance, Department of the Treasury, Washington, D.C., 20220. The standardized form can be accessed by visiting this spreadsheet link . If you wish to use a different format, please contact the OFAC Compliance… Read more

41. Should an institution tell its customer that it blocked their funds, and, if so, how does the institution explain it to them?

An institution may notify its customer that it has blocked funds in accordance with OFAC's instructions. The customer has the right to apply for the unblocking and release of the funds. To apply online to have the funds released, please go to our online application page …

Frequently Asked Questions

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