Introduction

Once you or your company have been added to the OFAC SDN List, a number of pressing questions inevitably arise: Is there anything that can be done? And if so, what exactly? Or would it be better to simply do nothing for the time being? Choosing to take no action is rarely a rational or defensible position when a person or entity is listed under U.S. sanctions. Here’s why.

What Happens If You Do Nothing?

It is no exaggeration to say that being designated on the OFAC SDN List – whether as an individual or a legal entity – is an extremely burdensome status. First and foremost, it results in the blocking of all assets located in the United States, in U.S.- controlled territories, or processed through U.S. financial institutions, including U.S. dollar transactions worldwide.

In addition, all persons subject to U.S. jurisdiction – referred to as “U.S. persons” – are prohibited from engaging in any financial or commercial dealings with sanctioned individuals or entities. This includes U.S. citizens, lawful permanent residents (green card holders), individuals of any nationality present in the United States, and companies incorporated in the United States or any jurisdiction under U.S. control, including foreign branches of such companies. If any assets controlled by U.S. persons are linked to a party designated on the OFAC SDN List, those assets must be frozen, and a report must be submitted to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

Beyond the loss of access to assets, individuals designated on the OFAC SDN List face severe travel restrictions, including the inability to obtain U.S. visas and similar denials from countries aligned with U.S. sanctions policy. Both individuals and entities under sanctions suffer significant reputational harm, which can lead to severed ties with existing partners, the inability to form new business relationships, and nearly insurmountable difficulties opening new bank or brokerage accounts.

Moreover, if no steps are taken to respond to the designation, the situation tends to worsen over time. Information about inclusion on the SDN List spreads quickly and often becomes surrounded by speculation, exaggeration, or outright misinformation. The reputational consequences snowball, creating new layers of complexity and escalating the problem. Designated persons frequently attract the attention of U.S. and other Western law enforcement agencies, especially if there is suspicion of efforts to circumvent sanctions.

The negative consequences often extend beyond the designated individual or company. For individuals, spouses, children, and close relatives may come under scrutiny by OFAC as potential facilitators of sanctions evasion. Under certain circumstances, they, too, may be added to the SDN List. These individuals may face difficulties opening bank accounts, obtaining visas, or accessing financial services simply due to their close relationship with the sanctioned person.

For companies, senior executives often face serious complications. A CEO or president of a designated entity may encounter difficulties obtaining visas to the United States, European Union countries, and other jurisdictions. Banks may shut down existing accounts and refuse to open new ones. Furthermore, if the CEO or president continues to serve in their position after the company is designated, there is a significant risk that they may be personally designated by OFAC in the near future.

Challenging a Designation on the OFAC SDN List

In such situations, waiting and hoping for a miracle makes little sense. In most cases, there is a real possibility of challenging an individual or company’s designation on the OFAC SDN List. The fact that relatively few designated persons have pursued this path so far primarily reflects a lack of accessible and reliable public information on the process of removal from the U.S. sanctions list.

The information that is currently available is often contradictory, and in many cases, outright misleading. In reality, there are multiple valid grounds for removal from the OFAC SDN List. These include behavioral changes, elimination of the original basis for designation, organizational restructuring (in the case of entities), cooperation with OFAC’s sanctions regime, as well as proving that the designation was made in error or that there was insufficient justification for it in the first place. Naturally, a court ruling can also serve as a basis for delisting.

Based on our experience, there is almost always a pathway to contesting a designation, whether for an individual or a company. The main exceptions tend to involve defense industry enterprises, certain systemically essential companies operating in sanctioned sectors of the Russian economy, and their senior leadership. However, even in such cases, the situation may change. For example, if top managers resign from such companies and provide documentary proof of their resignation, this may constitute a material change in circumstances. If they were listed in their individual capacity due to their position, such a change may allow them to submit a request for removal from the SDN List based on their altered conduct and status.

Conclusion

Unless you are a U.S.-licensed attorney who focuses on U.S. sanctions law, it is complicated to assess whether the available grounds for delisting are sufficient, and even more so to properly present and substantiate your case before OFAC. That is why acting without delay and consulting a qualified specialist is essential.

We are ready to promptly analyze your situation and develop a tailored action plan based on a thorough assessment of your case and the specific circumstances under which you or your company were added to the OFAC SDN List.