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e-CFR data is current as of July 9, 2020

Title 31Subtitle BChapter VPart 501Subpart C → §501.604


Title 31: Money and Finance: Treasury
PART 501—REPORTING, PROCEDURES AND PENALTIES REGULATIONS
Subpart C—Reports


§501.604   Reports on rejected transactions.

(a) Who must report—(1) Persons rejecting transactions. Any U.S. person (or person subject to U.S. jurisdiction), including a financial institution, that rejects a transaction that is not blocked under the provisions of this chapter, but where processing or engaging in the transaction would nonetheless violate a provision contained in this chapter, shall submit a report to the Office of Foreign Assets Control (OFAC).

(2) Financial institution. For purposes of this section, the term “financial institution” includes a banking institution, domestic bank, United States depository institution, financial institution, or U.S. financial institution, as those terms are defined in the applicable part of this chapter.

(3) Transaction. The term transaction includes transactions related to wire transfers, trade finance, securities, checks, foreign exchange, and goods or services.

(b) Required information to be reported. Reports on rejected transactions shall include the following:

(1) The name and address of the person that rejected the transaction pursuant to this chapter (i.e., the person filing the report on the rejected transaction, such as a financial institution), and the name and telephone number of a contact from whom additional information may be obtained;

(2) A description of the rejected transaction, including the type of transaction; any persons, including financial institutions, participating in the transaction and their respective locations (e.g., customers, beneficiaries, originators, letter of credit applicants, and their banks; intermediary banks; correspondent banks; issuing banks; and advising or confirming banks); a description of the property that is the subject of the transaction; and any reference numbers, account numbers, dates, or other information necessary to identify the transaction;

(3) If applicable, the associated sanctions target(s) whose involvement in the transaction has resulted in the transaction being rejected, the location(s) of the associated sanctions target(s), if known, and, if not evident, a narrative description of the interest(s) of the target(s) in the transaction;

(4) The date the transaction was rejected;

(5) The actual, or if unknown, estimated value of the property in U.S. Dollars. Rejected trade documents should be reported as $0.00 (zero) with the value of the shipment reflected in a narrative description. Rejected transactions in foreign currencies must be reported in U.S. Dollars with the foreign currency amount and notional exchange rate in a narrative description;

(6) The legal authority or authorities under which the transaction was rejected. This may include a reference to the sanctions program (current programs are listed here: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/program__tags.aspx), the applicable part of this chapter (e.g., 31 CFR part 515, 31 CFR part 544), an Executive Order (E.O.) (e.g., E.O. 13224, E.O. 13599), or a statute (e.g., Foreign Narcotics Kingpin Designation Act). (Note: For this purpose, the term “SDN” is generic and cannot be used to identify the legal authority or authorities for rejecting transactions); and

(7) A copy of any related payment or transfer instructions, check, letter of credit, accompanying bill of lading, invoice, or any other relevant documentation received in connection with the transaction.

(c) When reports are due. Reports shall be filed within 10 business days of the rejected transaction prohibited by the provisions of this chapter.

(d) Where to report. Reports under this section shall be submitted to OFAC using one of the following methods: Email: [email protected]; U.S. mail: Office of Foreign Assets Control, Sanctions Compliance and Evaluation Division, U.S. Department of the Treasury, 1500 Pennsylvania Avenue, NW, Freedman's Bank Building, Washington, DC 20220; or any other official reporting option, including electronic, as specified by OFAC on its website (http://www.treasury.gov/ofac). OFAC strongly prefers to receive reports made pursuant to this section by email or any other official electronic reporting option, as specified by OFAC on its website.

(e) Rules governing availability of information. OFAC records are made available to the public in accordance with the Freedom of Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part 1. See 31 CFR 1.5 for provisions pertaining to business information. Reports on rejected transactions and the information required to be reported to OFAC pursuant to this section are subject to the FOIA. Information provided to OFAC pursuant to this section generally will be released upon the receipt of a valid FOIA request, unless OFAC determines that such information should be withheld in accordance with an applicable FOIA exemption.

[84 FR 29060, June 21, 2019]

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