The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) maintains a list of persons who they believe are engaged in activity detrimental to U.S. national security interests. This list is known as the Specially Designated National (SDN) List. These persons can be either individuals or corporate entities and the evidence in support of OFAC’s decision is often unavailable to those who seek removal. Many times one finds themselves on the SDN list with no idea as to what they have done wrong.
The effect of these designations can be crippling. Not only will a designated person lose access to its assets under U.S. jurisdiction, they will also be denied access to the U.S. financial systems. Moreover, U.S. persons will not be able to engage in any sort of transaction with a person placed on the SDN list. The consequences of a U.S. person violating such a prohibition can have devasting consequences such as multi-million dollar fines and up to twenty years in imprisionment.
When persons have been placed on the SDN list, they are often confused as how to challenge the designation. This is because there is much confusion about what sanctions are, who issues them, and who enforces them. For this reason, designated persons spend many years trying to challenge a designation by going through the wrong channels. For example, when challenging an OFAC designation we have seen individuals try to challenge it through the State Department, through the Department of Justice, through the United Nations, and through the European Commission. Many times designated persons try to challenge their designation everywhere except the most logical choice: OFAC. OFAC is responsible for administering the SDN List, and OFAC is where one needs to challenge their designation.
Challenging these designations can be a long and arduous process. First, counsel must understand and learn every aspect of the designated person’s financial activities and his/her business relationships. Then a discovery process must be undertaken to uncover evidence to support the arguments as to why the designated person should be removed. Once this is done these arguments should be set forth in a Petition for Review, also known as a Request for Reconsideration. In this Request for Reconsideration, one has the right to ask for a hearing before OFAC to discuss their designation. However, OFAC is not required to provide one and indeed rarely does. Whether or not OFAC agrees to a hearing, the Request for Reconsideration could take a very long time for them to consider. This process can take anywhere from six months up to several years.
OFAC has designated hundreds of individuals and companies over the last year alone. In addition, there are thousands of designated persons on the SDN List. If you are on the SDN List, then you need to challenge that designation before any more harm comes to your financial well being and your reputation. There are ways to do this, but you need to consult with legal counsel who has done this before and understands both the removal process and how OFAC operates.
Our Firm offers representation in SDN List Removal. We have worked on a number of these matters and have fought vigorously for our clients. In addition, we also handle a number of other matters before OFAC, including representation on compliance issues, licensing, and investigations. We know how OFAC works and how to get you the best result in challenging an OFAC SDN List designation.