§ 501.604 Reports of rejected transactions. ( a ) *Who must report* — ( 1 ) *Persons rejecting transactions.* Any U.S. person (or person subject to U.S. jurisdiction in the case of part 515 of this chapter), 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 for purposes of this section includes wire transfers, trade finance, transactions related to securities, checks, or foreign exchange, and sales or purchases of goods or services.
( b ) *Required information to be reported.* Reports of rejected transactions shall include the following information, to the extent the information is available to the person submitting the report at the time the transaction is rejected: ( 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: *https://ofac.treasury.gov*), 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 through the OFAC Reporting System, available on OFAC's website, *https://ofac.treasury.gov/ofac-reporting-system .* If a submitter can provide evidence of unique and extraordinary circumstances that would not allow the submitter to use ORS, such as lack of access to the internet, the submitter may request to submit reports in an alternative manner by calling 202/622-2490. Such requests will be subject to a presumption of denial and granted only in writing.
( e ) *Rules governing availability of information.* Information submitted to OFAC pursuant to this section will be protected from disclosure under the Freedom of Information Act (FOIA) (5 U.S.C. 552) and the provisions of 31 CFR part 1 if OFAC reasonably foresees that disclosure would harm an interest protected by a FOIA exemption or disclosure is prohibited by law. See 31 CFR 1.5 for additional provisions relating to confidential commercial information.
[84 FR 29060, June 21, 2019, as amended at 89 FR 15740, Mar. 5, 2024; 89 FR 40376, May 10, 2024]