OFAC Final Rule Updating Blocking and Non-Blocking Order Procedures Across 35 Sanctions Programs

Mechanism

OFAC amends 35 parts of 31 CFR chapter V — the regulatory codifications of its sanctions programs — to harmonise how it documents and communicates two categories of actions:

1. Blocking / identifying-as-blocked orders targeting specific property or interests in property (i.e., asset-level, not whole-person, blocking). 2. Non-blocking orders that impose prohibitions less than full blocking on specific property or interests in property.

Two substantive clarifications stand out:

• **Federal Register publication is no longer the default for

pendency-of-investigation blocking** when applied to specific property rather than to a person. The note in each affected part is amended to make explicit that publishing the names of persons blocked during the pendency of an investigation will not necessarily apply to property-specific blocking. This narrows the channel by which affected parties might first learn of a property block through the FR docket.

• Unblocking and administrative-reconsideration notes are expanded to

describe additional procedures available to blocked or otherwise affected persons seeking release of blocked property — bringing the property-specific block parts into closer alignment with the reconsideration framework that already governs SDN-list designations (31 CFR 501.807).

This is a procedural/clarifying rule. It does not create new sanctions authority, designate new targets, or change the substantive scope of any existing program; it standardises the language and process by which OFAC exercises pre-existing blocking authority at the property level.

Downstream implications

• Compliance programs at financial intermediaries: bank and

broker-dealer sanctions-screening workflows that rely on Federal Register publication as a trigger for property-block detection need to add monitoring channels (OFAC.treasury.gov "Recent Actions", direct notices to affected parties) — the FR publication backstop is no longer guaranteed for property-specific blocks.

• Unblocking-petition counsel: expanded notes give blocked parties

clearer procedural footing to request reconsideration, which slightly lowers the cost of contesting a property-specific block.

• Enforcement-layer signal: arrives in the same procedural-modernisation

cluster as the 2024-10-08 reporting-procedures-and-penalties interim final rule (recordkeeping extension to 10 years, aligning with the 21st Century Peace through Strength Act's extended sanctions statute-of-limitations). Together these signal OFAC tightening the procedural perimeter around blocking and recordkeeping rather than expanding the substantive perimeter via new designations.

Open questions

• Whether OFAC will issue parallel guidance clarifying when it will use

property-specific blocking vs. SDN designation as the preferred tool — this rule clarifies the procedure but not the doctrine.

• Whether the expanded reconsideration notes translate into a measurable

uptick in successful unblocking petitions, or whether the substantive bar to reconsideration remains effectively unchanged.