Remote Server returned '550 5.7.520 Access denied, Your organization does not allow external forwarding

Delivery has failed to these recipients or groups:

Your message wasn't delivered because the recipient's email provider rejected it.

Remote Server returned '550 5.7.520 Access denied, Your organization does not allow external forwarding. Please contact your administrator for further assistance. AS(7555)

If you have received above error recently in an NDR, Check below settings and make changes as suggested to start the mail flow as usual. 

What caused it: Oct 2020: MC221119: Office 365 ATP External email forwarding controls and policy change

Above Policy Changes your Rules for automatic external forwarding in your Outbound Spam Filter Policy.

Which is by default set to AUTOMATIC - That blocks automatic external forwarding

• Automatic: Automatic external forwarding is blocked. Internal automatic forwarding of messages will continue to work. This is the default setting.

• On: Automatic external forwarding is allowed and not restricted.
• Off: Automatic external forwarding is disabled and will result in a non-delivery report (also known as an NDR or bounce message) to the sender.

In order to fix this issue, change your Policy from AUTOMATIC to ON. 

Changing policy setting to ON will allow Automatic External Forwarding that is been set on your Email Addresses inside your O365 Tenant.