OFAC updates 11 FAQs on blocking, rejecting and reporting transactions
The US Treasury's sanctions office amended 11 frequently asked questions covering when to block or reject a transaction and how to report to OFAC, as part of its ongoing review of published guidance.
On 26 October 2026 the Office of Foreign Assets Control (OFAC), the US Treasury office that administers sanctions, amended 11 of its frequently asked questions (FAQs): numbers 10, 32, 33, 34, 35, 36, 41, 42, 49, 50 and 53. OFAC said it made the changes as part of its ongoing process of reviewing published guidance to ensure information remains current. The announcement does not list what changed in each answer.
The amended FAQs fall under two topics: blocking and rejecting transactions, and filing reports with OFAC. The updated answers say that property is blocked when a blocked person has an interest in it, and that a transaction is rejected when it is prohibited but no blockable interest exists. They say both blocked property and rejected transactions must be reported to OFAC through its online reporting system within 10 business days.
FAQ 53 addresses how a financial institution should tell apart a customer's inquiry from a payment instruction. According to the updated answer, a payment instruction involving a blocked person means blocking the funds and reporting them, while a question alone requires no report.
FAQ 50 says holders of blocked property as of 30 June must file an Annual Report of Blocked Property by 30 September of the same year. Other amended answers cover how to block an account or funds transfer, interest on blocked funds, service charges on blocked accounts, whether to tell a customer their property was blocked, and which jurisdictions are under broad US sanctions.
Why it matters to AML professionals
These FAQs are the day-to-day reference for sanctions operations teams deciding whether a payment hit should be blocked, rejected or released. A wrong call or a late report can itself be a violation even when no money reaches a sanctioned party. Teams should compare the updated answers with their internal procedures and training material.
Red flags in this case
- A payment instruction naming a party that matches the sanctions list where the alert was closed without documented reasons
- A transaction to a comprehensively sanctioned jurisdiction routed through an intermediary bank or with location details removed
- A customer asking to open an account where screening shows a possible match to a blocked person
- Blocked or rejected items that were not reported within the required time
If this landed in your queue
- Confirm whether the hit is a true match before deciding to block, reject or release
- Decide whether a blockable interest exists; block if so, reject if the transaction is prohibited without one
- Report the blocked or rejected item to OFAC within 10 business days with supporting documents
- Record the decision and update internal procedures if they differ from the amended FAQs
Key terms
- Blocking
- Freezing property in which a sanctioned person has an interest, so it cannot be moved or used without OFAC permission.
- Rejecting
- Refusing to process a prohibited transaction and returning the funds to the sender when no sanctioned person has an interest to block.
- Annual Report of Blocked Property
- A yearly report to OFAC listing all blocked property held as of 30 June.
Interview angle
When would you block a payment rather than reject it?
Explain that blocking applies when a sanctioned person has an interest in the property, rejection applies when the transaction is prohibited without such an interest, and both must be reported to OFAC within 10 business days.
Sources
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