On March 12, 2025, the United States government increased the retention period for records of transactions under the Office of Foreign Assets Control (OFAC) to ten years. This change follows the passage of the "21st Century Peace Through Power" law in April 2024, which extended the duration of legal restrictions for civil and criminal violations related to the IEEPA and TWEA laws.
Details of the New Changes
According to this change, all records must be retained for ten years to align with the duration of the restrictions. Additionally, blocked assets must be retained for a longer period, meaning as long as those assets remain blocked and for ten years after the unblocking.
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OFAC explicitly addressed the challenges arising from this change and stated that legal requirements in other areas cannot be considered a valid excuse for non-compliance with these requirements. For example, organizations operating in the United States that also comply with European Union laws cannot use the differing requirements between these two areas to their advantage.
Challenges of Record Keeping
One of the main challenges in this area is how to record and maintain information. This issue becomes particularly important when records must be kept accurately and in full detail. For instance, the registration of names, review dates, information about the counterparty, and reasons for decision-making must be fully and accurately recorded in the records.
Currently, many organizations face multiple challenges in record retention. For example, information may be scattered across different systems, making it difficult to retrieve and analyze data. Meanwhile, some records may encounter issues due to inconsistencies in procedures and various recording methods.
Ultimately, to prevent problems arising from record keeping, organizations must document decisions at the time of reviews. This means that any decision-making must be recorded along with necessary information in a system to ensure easy access in the future.
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