Upon freezing the assets of a newly designated individual or entity, a financial institution's primary and immediate obligation is to report the action to the relevant national competent authority (NCA). This reporting is a critical component of the sanctions enforcement framework, as it informs the government about the assets that have been successfully blocked in accordance with the law. This allows authorities to monitor compliance and take further action if necessary. Failing to report a freeze is a serious compliance violation.

A. Notify the customer about the freezing.

This action could be considered "tipping off," potentially hampering wider investigations. The primary legal duty is to report to the authorities, not the sanctioned party.

B. Freeze accounts of the customer's family members that have accounts within the same financial institution.

Sanctions are targeted at listed individuals and entities they own or control. Freezing assets of non-designated family members without a legal basis is an overreach and not a standard requirement.

D. Transfer the funds to another financial institution where the customer has another account.

This is a direct violation of the sanctions. An asset freeze explicitly prohibits any movement, transfer, or dealing with the funds of the sanctioned person.

1. Council of the European Union. (2018). EU Best Practices for the effective implementation of restrictive measures. Document 8519/18.

Page 20, Section V, Paragraph 69: "Operators should, without delay, inform the competent authority of the Member State where they are resident or located of any assets frozen in implementation of the restrictive measures in force and of any authorisation granted, in accordance with the relevant provisions of the legal acts." This directly supports the requirement to inform authorities.

2. Council Regulation (EU) No 269/2014 of 17 March 2014. Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

Article 9, Paragraph 2: "Natural or legal persons, entities or bodies shall immediately supply any information which would facilitate compliance with this Regulation, such as information on accounts and amounts frozen in accordance with Article 2, to the competent authorities of the Member States where they are resident or located..." This article establishes the legal obligation to supply information about frozen assets to competent authorities.

3. ACAMS. (2023). Certified Global Sanctions Specialist (CGSS) Study Guide.

Chapter 4: Sanctions Evasion and Investigations: The guide details the process following a confirmed sanctions match, which includes blocking/freezing the transaction or account and then promptly filing a report with the relevant regulatory body (e.g., OFAC in the US, or the respective NCA in the EU). This confirms that reporting is a mandatory step after freezing.