USA Law and Practice Contributed by: Bruce G. Paulsen, Brian Maloney and Hannah Thibideau, Seward & Kissel LLP
licence, an attorney must apply for a specific licence from OFAC in order to provide services. In some instances, OFAC permits the provision of legal services in jurisdictions with territory-wide sanc - tions. For instance, in connection with OFAC sanc - tions targeting Russia, OFAC permits the provision of legal services to or on behalf of a person in the Crimea region of Ukraine; see 31 CFR § 589.506. OFAC also permits the provision of legal services in connection with its Iran and Cuba sanctions regimes; see 31 CFR § 560.525 and 31 CFR § 515.512. 2.4 Reporting US persons (and those subject to US jurisdiction) who are in possession or control of blocked property must file a Report on Blocked Property with OFAC within ten business days of the date that the property becomes blocked. Forms for reporting blocked property, wheth - er “Financial” or “Tangible/Real/other Non-Financial Property”, are available on OFAC’s website and are commonly used by reporting persons. Persons hold - ing blocked property must also file an Annual Report on Blocked Property by 30 September, reflecting all blocked property held as of 30 June of the current year. US persons (and those subject to US jurisdiction) must also file a Report of Rejected Transactions within ten business days of the rejection of a transaction that was not blocked, but where processing or engaging in the transaction would nonetheless violate applicable US sanctions. US persons participating in litigation, arbitration or other binding alternative dispute resolution on behalf of or against persons whose property or interests in property are blocked or retained under applicable law; or where the outcome of any proceeding may affect blocked property or retained funds; must pro - vide notice of such proceedings and submit copies of certain documents submitted and orders or opin - ions rendered by the court or other adjudicatory body. In addition, they must provide reports of hearings or status conferences where it appears the court may issue an order or judgment or is considering or may decide any pending dispositive motion on the merits of the proceeding or any claim raised therein, as fur - ther detailed in OFAC’s regulations.
Persons subject to OFAC record-keeping require - ments (ie, by engaging in a transaction pursuant to an OFAC licence) or reporting requirements with respect to blocked property are to retain records of such transactions for five years after the date of such transaction, or for the period such property is blocked, and for at least five years after the date such property is unblocked. 3. Recent and Future Legal Developments 3.1 Significant Court Decisions or Legal Developments The most significant developments related to sanc - tions in the past three years include the following. • Enhanced government enforcement against con - duct in violation of US sanctions laws and regula - tions, with a recent focus on secondary sanctions that target third-country actors and sanctions evaders. This focus has prompted high-level US officials to communicate at industry conferences that “sanctions are the new FCPA”, referencing that the DOJ and other government agencies are now directing additional resources to investigate and enforce against violations of sanctions laws and regulations, mirroring those regulators’ histori - cal focus on international violations of the Foreign Corrupt Practices Act by US persons (or others subject to US jurisdiction). • The April 2024 passage of the “21st Century Peace Through Strength Act”, which includes a provision extending the statute of limitations for enforcement of sanctions violations under both IEEPA and the Trading with the Enemy Act (TWEA), from five to ten years. The lengthened statute of limitations will affect all of the numerous sanctions programmes enacted under IEEPA and TWEA, and gives the government additional breathing room to inves - tigate and enforce against apparent violations of those laws and regulations. • A final rule amending various reporting, procedures and penalties regulations, effective on 8 August 2024. In the new rule, filers are generally required to use the electronic OFAC Reporting System (ORS) for submission to OFAC of initial reports of
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