When must a holder of blocked property file a report with OFAC?
31 CFR 501.603 requires any person holding blocked property, and any person rejecting a prohibited transaction, to file a report with OFAC, including an initial report and an annual report of blocked property.
The answer
The reporting requirement
31 CFR 501.603 requires a person holding blocked property to report to OFAC, generally within 10 business days of blocking, and to file an annual report of blocked property held as of a set date each year. The section also requires reports of rejected transactions.
Who must report
The obligation falls on the person holding the blocked property, including banks and other financial institutions that block funds, as well as on any person who rejects a transaction prohibited under the sanctions programs. The report must contain the information OFAC specifies.
The judged input
What the AI drafted
Submitted to the judgeThis is an excerpt from a draft OFAC advisory memo — the kind of work product a lawyer generates with a legal-AI drafting tool, then has to stand behind. Kingsfield does not write it; it rules on the citations the model put in it. This draft cites two authorities; one of them is wrong.
The judge ruled on every citation as the draft used it — it accepted 31 CFR 501.603 and rejected 31 CFR 501.601. Here is why.
The verdict
How Kingsfield ruled
Ruled 2026-06-23Each citation in the draft above was submitted to the Kingsfield judge and ruled against the primary-law corpus — Accept, Reject, or Inconclusive, per citation. These are live verdicts, not editorial. Each card shows the claim the draft made and the verbatim authority the verdict was rendered against.
The draft claimed: A person holding blocked property, and a person rejecting a prohibited transaction, must file reports with OFAC, including an initial report of blocked property and an annual report of blocked property held.
“Who must report —(1) Persons holding, unblocking, or transferring blocked property. Any U.S. person (or person subject to U.S. jurisdiction in the case of part 515 of this chapter), including a financial institution, holding, unblocking, or transferring property blocked pursuant to this chapter shall submit the relevant reports described in this section to…”
Cite found; proposition supported by the cited text.
The draft claimed: Section 501.601 requires a holder of blocked property to file an initial report and an annual report of blocked property with OFAC.
Cite found, but the cited text does not support the claim. 31 CFR 501.601 is the recordkeeping requirement, directing persons to keep full records of regulated transactions for at least five years; the affirmative duty to file blocked-property reports is at 31 CFR 501.603. Regenerate with the correct authority.
Run your own work through the judge
Kingsfield rules on every citation, quote, and proposition your AI produces, against the primary law we cover. Accept, Reject, or Inconclusive, per citation, with a signed Audit Capsule.
Connect the Judge See the architectureThis page is legal information, not legal advice, and does not create an attorney-client relationship. The draft shown is an illustration of a typical AI answer; verdicts reflect the cited authority in the Kingsfield corpus as of the ruling date shown above.