On April 24, 2024, President Biden signed into law H.R. 815, which authorizes supplemental appropriations to several federal agencies for assistance to Ukraine, Israel, and Taiwan, and contains certain other provisions, including provisions that could force a divestiture of social media platform TikTok (often reported in the media as the TikTok bill). Garnering less public attention, H.R. 815 also contains sanctions-related provisions, including provisions requiring the president to impose certain sanctions on foreign persons in connection with fentanyl trafficking, and perhaps more importantly, Section 3111 of H.R. 815 extends the statute of limitations for the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) from five years to 10 years.
As many readers of Enforcement Edge are aware, IEEPA serves as a statutory basis for almost all sanctions programs administered by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), while TWEA serves as a statutory basis for the Cuba sanctions program. This means that, as a result of H.R. 815, the statute of limitations for U.S. sanctions has now become 10 years.
The extension of the statute of limitations will have a direct impact on future enforcement actions involving potential sanctions violations. It also may impact companies' sanctions compliance programs and how companies conduct sanctions-related internal investigations and corporate transaction due diligence. For example, companies now may need to consider (or be required to conduct) a 10-year review when conducting internal investigations or when filing voluntary disclosures. Although current recordkeeping requirements under U.S. sanctions are limited to five years, we expect OFAC to amend its recordkeeping regulations to reflect the new 10-year timeframe. Accordingly, companies may need to update their record-keeping policies to ensure that sanctions-compliance-related records are kept for at least 10 years.
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