Once you or your company have been added to the OFAC SDN list, inevitable questions arise: “Is there anything that can be done about this? And if so, what exactly? Or perhaps it’s better to wait and do nothing for now? ”Adopting a ‘wait and see’ approach is rarely a rational or justifiable response when an individual or business is placed on a U.S. sanctions list—and here’s why.

What Happens If You Do Nothing?

It is no exaggeration to state that the status of a sanctioned individual or entity, whether a person or a business, brings with it significant burdens. Specifically, being placed on the OFAC SDN (Specially Designated Nationals) list results in freezing all assets within the United States, U.S.-controlled territories, or those processed by U.S. financial institutions, including all global U.S. dollar transactions.

In addition, all U.S. persons are strictly prohibited from engaging in any financial or commercial dealings with sanctioned individuals or entities. If any assets belonging to an OFAC SDN-listed person come under the control of a U.S. person, those assets must be frozen, and the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury must be immediately notified.

Notably, the term “U.S. persons” includes US citizens, lawful permanent residents (green card holders), individuals of any nationality located within the U.S., and entities incorporated in the U.S. or any U.S.-controlled jurisdiction—including foreign branches of these entities.

Beyond losing access to their assets, individuals subject to sanctions often face severe travel restrictions, including the inability to obtain visas to the United States or other countries supporting U.S. sanctions. Both individuals and entities suffer severe reputational damage. This can result in strained or severed relationships with former partners, an inability to establish new business relationships, and nearly insurmountable difficulties opening new bank or brokerage accounts.

Significantly, if nothing is done to address the situation, these problems worsen over time. Information about one’s sanctioned status spreads quickly, compounding like a snowball. New challenges continue to emerge. Sanctioned persons often become subjects of investigations by U.S. or other Western law enforcement agencies, particularly if there is any suspicion of sanctions evasion.

Moreover, the consequences of being added to the OFAC SDN list are rarely limited to the listed person or entity alone. In the case of an individual, close family members, including spouses, children, and immediate relatives, often fall under OFAC’s scrutiny as potential enablers of sanctions evasion. They may face denial of bank services, visa rejections, or other restrictions simply due to their association with the sanctioned person.

The situation can be equally challenging for companies’ senior management. For example, a CEO or president of a sanctioned company may find obtaining visas to the U.S., Europe, and many other countries extremely difficult. Existing foreign bank accounts may be closed, and opening new ones can become nearly impossible. Furthermore, if such executives continue in their roles after the company is sanctioned, they may soon be added to the OFAC SDN list.

Challenging Your Inclusion on the OFAC SDN List

In such a situation, it is unlikely that waiting and hoping for a miracle is a viable strategy. In fact, there is almost always an opportunity to challenge your or your company’s inclusion on the OFAC SDN sanctions list. The relatively few sanctioned individuals and entities that have taken steps to challenge their designation speak mainly to the fact that there is still limited public information about the process of removal from the OFAC SDN list. Moreover, the existing information is often contradictory and misleading.

In reality, there are several legitimate grounds for removal from the OFAC SDN list. These include changes in behavior, elimination of the original causes of listing, organizational changes (in case of entities), involvement in ensuring compliance with OFAC sanctions, proof of erroneous inclusion or insufficient grounds for designation, and, of course, a court decision.

From our experience, there is almost always a chance to challenge the inclusion of an individual or company on the OFAC SDN list—except, perhaps, for companies in the Russian military-industrial complex, certain key companies operating in sanctioned sectors of the Russian economy, and their leadership. However, even in the case of leadership, things can change. For example, if an executive of such a company resigns and can provide relevant documentation to prove this, it may be possible to submit these documents and request his removal from the OFAC SDN list due to the change in circumstances and his conduct.

Conclusion

Navigating U.S. sanctions law is difficult without the expertise of a qualified American attorney. It can be challenging to determine whether the grounds for being excluded from the U.S. sanctions list are sufficient, and even more so to properly draft and submit a compelling case for review by OFAC. That’s why it’s essential to contact a specialist without delay.

We are prepared to promptly assess your situation and provide a tailored action plan based on a detailed analysis of the unique circumstances surrounding your inclusion on the OFAC SDN list.