Are You Holding Blocked Property? File a Report!

If you are holding property that is blocked by export regulations, then you may need to file an annual report!

Treasury Department export regulations are published by the Office of Foreign Asset Control (OFAC). When OFAC regulations require that property be blocked from export, then you may be required to hold that blocked property. If your company is holding any OFAC-blocked property, then you must prepare an annual report. 

The current annual report covers any property that was held by your company between July 1, 2025 and June 30, 2026 (yesterday). This report will be due on September 30, 2026.

An example of how this can happen arises in managed repair transactions. Imagine that Chabok FZCO sent you an IRU to be overhauled, earlier this year. You obtain the overhaul , and before you send the unit back to Chabok FZCO, you perform the normal export compliance checks that get performed for every export. During your due diligence, though, you learn that Chabok FZCO was listed as a Specially Designated Nations (SDN) by OFAC on April 21, 2026. You learn this information on or about June 15, 2026. Now, you cannot export the IRU to Chabok without an OFAC license, and that license is unlikely to be issued.

Even though the hypothetical IRU belongs to Chabok, it is treated as blocked property under the OFAC regulations. You will need to retain this property. You will also need to file an annual report for each year when you held the blocked poroperty. The first report will be the one due September 30, 2026 for blocked property hat your company held between July 1, 2025 and June 30, 2026.

Is there some way to stop holding the property? It is possible to seek an OFAC license to sell the goods for fair market value (don’t sell the blocked property without a license!). In such a case, you would take the proceeds of that sale and they would be held as blocked assets in a special account at your bank. You still need to file the annual report; but this allows you to mitigate the loss associated with aging of the aircraft part, and it relieves you of an obligation to maintain the unit.