Automatic email forwarding to external user not working in O365

When we set-up automatic forward of emails to external user it can fail with NDR – 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)’. This is because of policies/rules which we need check.

1. First check the antispam settings – https://protection.office.com/antispam – Outbound spam filter policy and make sure automatic forwarding is enabled.
2. Check Remote domain under mail flow and ensure automatic forwarding is allowed.
3. Also we need to check rules under mail flow and confirm that none of the rules are blocking auto forwarding to external user.