Do you have to report a blocked or rejected transaction to OFAC? What to file, and by when
Quick answer, Nov 3, 2026As of 3 November 2026, a US person who blocks property or rejects a prohibited transaction must file a report with OFAC within 10 business days, through the OFAC Reporting System. Holders of blocked property file again every year by 30 September, covering what they held on 30 June.
The five reports
The deadlines sit in OFAC's Reporting, Procedures and Penalties Regulations at 31 CFR part 501, and they bind any US person, not only financial institutions.
| Report | Who files | When it is due | Rule |
|---|---|---|---|
| Initial blocking report | Any US person holding property that becomes blocked | Within 10 business days of the date the property becomes blocked | 501.603(b)(1) |
| Rejected transaction report | Any US person who rejects a transaction that is not blocked but could not lawfully be processed | Within 10 business days of the rejection | 501.604(c) |
| Annual Report of Blocked Property | Anyone holding blocked property on 30 June | Annually by 30 September | 501.603(b)(2) |
| Unblocking or transfer report | The holder immediately before the property is released or moved | Within 10 business days of the unblocking or transfer | 501.603(b)(3) |
| Litigation notice | A US person in US litigation, arbitration or binding dispute resolution whose outcome may affect blocked property | Notice on commencement; filings and orders within 10 days | 501.605 |
OFAC FAQ 49, updated 26 October 2026, states the same 10-business-day clock for both blocking and rejected-transaction reports and adds that each must carry copies of the supporting documents.
Block or reject: you are not filing the same thing
The two reports answer different facts, so settle which one happened before you draft either. OFAC FAQ 36 draws the line: where a transaction is prohibited for US persons but no blocked person holds an interest in it, there is nothing to block, and the transaction "should be rejected and returned to the originator." Rejected transactions must not be passed on to the beneficiary. Where a blocked person does hold an interest, the property is blocked and stays put.
Who owes the report
Under 501.603(a)(2), an attorney or agent may file, but primary responsibility rests with the actual holder of the property — with two carve-outs: trust assets are the trustee's to report, and real property is reported by a US co-owner, legal representative, agent or property manager. Someone else filing on the same property does not excuse you unless you have actual knowledge of their report.
Four releases need no unblocking report: authorised debits for normal service charges, authorised transfers between blocked accounts inside one institution, an unblocking explicitly authorised by a general or specific licence that carries no reporting condition, and an unblocking that follows removal from the SDN List.
How to file
Initial blocking reports, rejected-transaction reports and the annual report go through the OFAC Reporting System. Register before you need it: access is requested by email to OFACReport@treasury.gov, naming the institution and the people authorised to file. The first two forms are built into the system. Per FAQ 50, the annual report uses the TD F 90-22.50 spreadsheet, submitted through the system, and under 501.603(d)(1) funds held in an omnibus account must be listed asset by asset. An alternative filing method carries, in the regulation's words, "a presumption of denial."
Keep the file. 31 CFR 501.601 requires records of the transaction to be available for examination for at least 10 years, and for blocked property, 10 years after it is unblocked.
When the hit was a false positive
A name match confirmed in error is still a block on your books until you unwind it on the record. FAQ 1196 sets two routes: unblock and file an unblocking report under 501.603(b)(3) citing FAQ 1196 as the reason, or request a Compliance Release under 31 CFR 501.806, by email with that section number in the subject line. OFAC confines the release process to mistaken identity and typographical errors, warns that unblocking property a blocked person really has an interest in can draw civil penalties, and says it is no substitute for screening controls that adjudicate matches properly in the first place. Civil penalty standards now sit in their own part, the Sanctions Penalties Regulations at 31 CFR part 505, effective 25 September 2026.
In an AI assistant
list_ofac_actions on the Distributed Risk MCP server shows the designations, removals, licences and FAQs behind a hit, newest first, from Claude, ChatGPT or another client. search_federal_register pulls OFAC rule changes by date, which is how you catch an amendment to the reporting rules themselves. search_screening_lists runs the name. Setup is in Using a sanctions MCP server.
Questions
Do non-financial companies file these reports? Yes. 501.603 and 501.604 both read "any U.S. person ... including a financial institution," and 501.604(a)(3) counts sales and purchases of goods and services as transactions.
What if the counterparty is not listed but is owned by someone who is? Then the property may be blocked by operation of the 50 Percent Rule, and the same clock runs. Work the chain first: Does the OFAC 50 Percent Rule block your counterparty?
What does skipping the report cost? Beyond penalty exposure, it closes a door: per FAQ 51, OFAC generally does not process requests to release blocked funds where no corresponding blocking report was filed.
Is this legal advice? No. This page is a procedural checklist drawn from the public record. Counsel decides what applies.