When FinCEN issued its July 27, 2026 statement offering BSA forbearance for authorized financial services in Venezuela through January 29, 2027, your team saw a chance to support earthquake relief without enforcement risk. But forbearance isn't an exemption. The statement doesn't modify, waive, or suspend any BSA requirement. It simply commits not to enforce violations that result from good-faith efforts to provide authorized services. Misreading the conditions or confusing forbearance with regulatory amnesty can lead to losing protection before you realize it.
Why These Mistakes Keep Happening
Forbearance policies can create a false sense of safety. You're still operating under the same BSA Requirements, Customer Due Diligence, Suspicious Activity Report filing, Currency Transaction Report thresholds, and recordkeeping obligations, but with a temporary promise that FinCEN won't cite violations tied to Venezuela operations. The problem is that teams often treat "won't enforce" as "don't need to comply" and stop applying the controls that keep them eligible for forbearance. The three conditions FinCEN listed aren't suggestions; they're prerequisites. Break one, and the entire commitment evaporates.
Mistake 1: Treating Forbearance as a Regulatory Waiver
Why it happens: Teams assume BSA Requirements don't apply during the forbearance period because FinCEN won't take enforcement action. They skip Customer Due Diligence refreshes, delay Suspicious Activity Reports, or stop documenting Venezuela-related transactions.
The consequence: You're still required to maintain your BSA compliance program and engage in reasonable efforts to comply with BSA Requirements. Abandoning those efforts violates the first condition. When FinCEN or your primary federal regulator conducts an exam after January 29, 2027, they'll see months of missing SARs, incomplete CDD files, and undocumented high-risk transactions. The forbearance won't cover that, it only protects violations that occur despite reasonable compliance efforts, not violations caused by abandoning those efforts.
The fix: Continue every BSA obligation as written. File SARs when activity meets the threshold. Complete CDD and Ongoing Due Diligence on Venezuelan counterparties. Document every transaction with the same rigor you'd apply to any high-risk jurisdiction. The forbearance protects you from enforcement if you make a good-faith error while complying, it doesn't protect you from choosing not to comply.
Mistake 2: Ignoring the 24-Month Clean Record Condition
Why it happens: Compliance officers assume forbearance applies universally to all US financial institutions and don't check whether their institution qualifies. The second condition disqualifies any institution that's been subject to a final enforcement action involving BSA Requirements or similar regulatory requirements within the prior 24 months.
The consequence: If your institution received a consent order, civil money penalty, or cease-and-desist letter from FinCEN or your primary federal regulator between July 27, 2024, and July 27, 2026, you cannot rely on the forbearance statement. Providing Venezuela services anyway exposes you to full BSA enforcement with no relief. You won't discover this until FinCEN or the Federal Banking Agencies cite you for violations, at which point you'll argue reliance on the forbearance and they'll point to the enforcement action that disqualified you.
The fix: Pull your enforcement history before you authorize any Venezuela transactions. Check FinCEN's enforcement database and your primary regulator's public actions. If you've had a final action in the 24-month lookback, you're not eligible. Period. Don't assume silence means compliance, verify with your legal and compliance leadership that no final action has been issued against your institution during that window.
Mistake 3: Exceeding the Scope of OFAC Authorizations
Why it happens: Teams read the FinCEN statement in isolation and miss that the forbearance only covers "authorized financial services." The scope is defined by OFAC, not FinCEN. Specifically, General License 60 authorizes earthquake relief transactions through October 23, 2026, and General License 57 authorizes financial services to specified Venezuelan banks and certain individuals. If your transaction doesn't fit within GL 60 or GL 57, it's not authorized, and the FinCEN forbearance doesn't apply.
The consequence: You provide a service you believe is covered by forbearance, but it falls outside the OFAC authorizations. Now you've violated both the Venezuela Sanctions Regulations and the third condition of FinCEN's forbearance (remaining compliant with OFAC-administered sanctions). A single screening failure can forfeit BSA forbearance and create independent sanctions exposure. You'll face enforcement from OFAC and potentially from FinCEN or your primary regulator, with no forbearance protection.
The fix: Map every Venezuela transaction to a specific OFAC authorization before processing it. GL 60 expires on October 23, 2026, three months before the FinCEN forbearance ends on January 29, 2027. After GL 60 expires, earthquake relief transactions are no longer authorized unless OFAC renews or replaces the license. Set a calendar reminder for October 15, 2026, to check OFAC's website for updates. For GL 57 transactions, confirm the counterparty is one of the four named banks, an entity they own 50 percent or more, or an individual blocked solely under Executive Order 13884 who meets the "Government of Venezuela" definition but isn't on the SDN List. If you can't confirm the match, don't process the transaction.
Mistake 4: Assuming the Federal Banking Agencies' Statement Extends the Timeline
Why it happens: The Federal Reserve, FDIC, NCUA, and OCC issued a joint statement on July 31, 2026. Teams assume this creates a longer forbearance window or broader relief.
The consequence: The Federal Banking Agencies' commitment runs from July 31, 2026, through January 29, 2027, covering the same endpoint but starting later. If you provided Venezuela services between July 27 and July 30, 2026, you're covered by FinCEN's forbearance but not by the Agencies' statement. More importantly, the Agencies' statement doesn't expand the scope of relief, it reinforces FinCEN's commitment with the same three conditions. Misreading the timeline or assuming the Agencies added protections that FinCEN didn't offer leads to unprotected exposure during the gap period or reliance on relief that doesn't exist.
The fix: Track both statements separately. If your institution is supervised by the OCC, Federal Reserve, FDIC, or NCUA, note that the Agencies' forbearance starts July 31, 2026. For transactions between July 27 and July 30, rely on FinCEN's statement alone. Don't assume the Agencies' later issuance implies broader coverage, it's substantively identical to FinCEN's commitment, just issued by different supervisors.
Mistake 5: Failing to Document the Forbearance Reliance
Why it happens: Compliance teams process Venezuela transactions under the forbearance but don't create a record showing they reviewed the conditions, confirmed eligibility, and mapped each transaction to an OFAC authorization. When examiners review the file months later, there's no evidence the institution understood or relied on the forbearance correctly.
The consequence: Without documentation, examiners can't verify you met the three conditions when you processed the transactions. They'll treat the transactions as ordinary high-risk activity in a sanctioned jurisdiction and apply full BSA scrutiny. If you made errors, even good-faith ones, you'll struggle to prove you were exercising reasonable care under the forbearance framework. Documentation gaps also signal weak governance, which undermines your claim that you maintained a compliant BSA program throughout the forbearance period.
The fix: Create a Venezuela forbearance file. For each transaction, document: (1) the OFAC authorization you're relying on (GL 60 or GL 57), (2) confirmation that your institution meets the three conditions, (3) the Customer Due Diligence and sanctions screening results, and (4) any escalations or MLRO reviews. Update the file each time you process a Venezuela transaction. When the forbearance period ends, you'll have a complete audit trail showing reasonable compliance efforts, the standard FinCEN set for protection.
Prevention Checklist
Before you rely on FinCEN's forbearance for Venezuela operations:
- Confirm your institution has not been subject to a final BSA enforcement action within the prior 24 months
- Verify every transaction maps to General License 60 (expires October 23, 2026) or General License 57
- Maintain your BSA compliance program in full, CDD, Ongoing Due Diligence, Suspicious Activity Report, CTR thresholds, recordkeeping
- Screen every Venezuelan counterparty against OFAC's SDN List and confirm they're not blocked except as authorized by GL 57
- Document your forbearance reliance for each transaction, including the OFAC authorization and condition verification
- Set a reminder for October 15, 2026, to check whether OFAC renews GL 60 before it expires
- Review the Federal Banking Agencies' statement if you're supervised by the Federal Reserve, FDIC, NCUA, or OCC
- Escalate any screening failure to your MLRO immediately, it forfeits the forbearance and creates sanctions exposure
Forbearance is a commitment not to enforce, not permission to stop complying. The institutions that benefit are the ones who treat it as a safety net for good-faith errors, not as a license to relax controls.
