53. How do I differentiate between an "inquiry" and a "payment instruction" when a customer wants to send a wire transfer to a sanctioned party or country?
In those programs with blocking provisions, OFAC's regulations block all "property" in which a target has an interest. The term "property" is very broadly defined, including present, future or contingent interests. In the case of a wire transfer, the bank will be holding blocked property upon the receipt of concrete instructions from its customer to send the funds. In this case, the funds must be blocked and reported to OFAC within ten days. If, on the other hand, a customer simply asks "Can I send money to Cuba?" there is no blockable interest in the inquiry and the bank can answer the question or direct the customer to OFAC. The same logic applies to cases where the transaction would be...
1) Some embargo programs (e.g. Iran) contain blocking provisions (560.211), but those blocking provisions do not apply to all Iranians, so there are scenarios where rejection is appropriate and others where blocking is appropriate. Refer to FAQ 36. "Target" here refers to blocked individuals and entities in particular, rather than all entities and individuals subject to the embargo.
2) This FAQ, and the "concrete instructions" standard in particular, were the subject of Case No. FNK-2016-333921-1 (Comercializadora Transpacifico, S.A. v. Mnuchin et al (1:17-cv-21807) (SDFL, 2017)). The Plaintiff argued that funds were sent by a bank without the bank first having "concrete instructions" to send them through a blocked bank. OFAC appears to have accepted the argument, agreeing to unblock the funds without formally responding to the complaint.
3) This is, impliedly, an interpretation of the...