OFAC Provides Guidance on Extended Statute of Limitations

As we previously reported, effective April 24, 2024, the statute of limitations for most civil and criminal violations of the International Emergency Economic Powers Act (IEEPA) or the Trading with the Enemy Act (TWEA) has been extended from five years to 10 years. In response to some uncertainty as to how the extended period of limitations (codified at 50 U.S. Code § 1705(d) and 50 U.S. Code § 4315(d)) would be applied, OFAC has issued guidance clarifying that the new 10-year statute of limitations applies to any violation that was not time-barred at the time of its enactment, meaning that OFAC may now commence an enforcement action for civil violations of IEEPA- or TWEA-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019. OFAC reminded the public that the commencement of a civil enforcement action includes the issuance of a pre-penalty notice or a finding of violation.

OFAC also stated that, in light of the new, extended statute of limitations period, it anticipates publishing an interim final rule, with an opportunity to provide comment, extending from five years to 10 years the recordkeeping requirements codified at 31 C.F.R. § 501.601, and that the new 10-year recordkeeping requirement will become effective six months after publication of the interim final rule.

Given OFAC's stated intention regarding revision of its recordkeeping requirements, persons subject to OFAC jurisdiction under IEEPA or TWEA should begin immediately to comply with the 10-year recordkeeping requirements.

Please let us know if you have any questions regarding application of the new statute of limitations or the corresponding recordkeeping requirements.