OFAC Blocked Assets Lawyers
When financial institutions identify a potential OFAC sanctions violation, they are required to block the funds involved. Our lawyers specialize in obtaining OFAC authorization to release blocked assets through special license applications and SDN list removal proceedings.
Quick Answer
OFAC blocked assets are funds or property frozen by the U.S. Treasury’s Office of Foreign Assets Control because the owner is connected to a sanctioned party or country. To release blocked assets, the owner must either obtain an OFAC-specific license, successfully petition for removal from the sanctions list, or demonstrate the assets do not belong to a sanctioned party. The process typically takes 3–18 months.
What Are OFAC Blocked Assets?
OFAC blocked assets are funds, property, or financial instruments that have been frozen under U.S. economic sanctions administered by the Office of Foreign Assets Control (OFAC), a bureau of the U.S. Department of the Treasury. When assets are blocked, the owner loses the ability to access, transfer, sell, or use them in any way — effectively making the assets inaccessible until legal authorization is obtained.
Assets become blocked when OFAC determines they belong to, or are held on behalf of, a party on the Specially Designated Nationals (SDN) List, or when they are located in or associated with a comprehensively sanctioned jurisdiction such as Iran, Cuba, North Korea, or Syria.
The blocking of assets is immediate and automatic under U.S. law. Any U.S. financial institution — bank, brokerage, payment processor — that holds or processes property belonging to a sanctioned party is legally required to freeze those assets and report them to OFAC within 10 business days.
Common Types of OFAC Blocked Assets
| Asset Type | How It Gets Blocked | Who Holds the Block |
|---|---|---|
| Bank Accounts & Wire Transfers | Wire transfer intercepted by U.S. correspondent bank; account holder is SDN-listed | U.S. or foreign bank with USD correspondent relationship |
| Real Estate | Property owned by SDN-listed individual or 50%+ owned by sanctioned entity | Title company, mortgage servicer, or state government |
| Investment Accounts & Securities | Brokerage detects owner is on SDN list during onboarding or periodic review | U.S. brokerage or custodian bank |
| Cryptocurrency | Wallet address linked to sanctioned entity; exchange blocks withdrawal | Crypto exchange or custodian |
| Trade Finance / Letters of Credit | Transaction involves sanctioned country, entity, or vessel | Issuing or confirming bank |
| Insurance Proceeds | Beneficiary or insured party is sanctioned; claim payment blocked | U.S. insurer or reinsurer |
| Inheritance / Estate Assets | Deceased or heir is SDN-listed; Iranian or Cuban beneficiary | Probate court, estate administrator, U.S. bank |
The OFAC 50 Percent Rule and Blocked Assets
One of the most significant — and most misunderstood — aspects of OFAC blocked asset policy is the 50 Percent Rule. Under this rule, any entity that is owned 50% or more by a sanctioned person or entity is automatically considered blocked, even if the entity itself does not appear on the SDN List.
This means that if a company’s assets are blocked because a 51% shareholder was added to the SDN List, all assets of that company — including subsidiaries — are blocked. Many asset holders are unaware their property is subject to blocking until a U.S. financial institution rejects a transaction or freezes an account.
How to Release OFAC Blocked Assets: Step-by-Step Process
Releasing blocked assets requires navigating OFAC’s administrative and legal processes. The two primary pathways are: (1) obtaining a specific OFAC license authorizing the release, and (2) successfully petitioning for removal from the SDN List (delisting). In some cases, it may also be possible to demonstrate that the blocked assets do not, in fact, belong to the sanctioned party.
| Step | Action Required | Typical Timeline | Key Considerations |
|---|---|---|---|
| 1. Confirm the Block | Obtain written confirmation from the holding institution identifying the OFAC authority and SDN entry causing the block | 1–5 business days | Always get the specific regulatory basis in writing |
| 2. Legal Analysis | Engage OFAC counsel to assess the nature of the block, applicable sanctions program, and available legal remedies | 1–2 weeks | Attorney-client privilege protects strategy discussions |
| 3. Identify the Release Path | Determine whether to apply for an OFAC-specific license, submit a delisting petition, or challenge the blocking | 1–2 weeks | Multiple paths can be pursued simultaneously |
| 4. Prepare the Application | Compile documentation: ownership structure, transaction history, business justification, evidence of no sanctions nexus | 2–6 weeks | Incomplete applications cause significant delays |
| 5. Submit to OFAC | File through OFAC’s official portal or by letter; for delisting, submit a petition to the Office of Global Targeting | 1–3 days to file | Track submission confirmation numbers |
| 6. OFAC Review | OFAC reviews the application; may request additional information (RFI) | 3–12 months (licenses); 6–24 months (delisting) | Respond promptly to any OFAC requests for information |
| 7. Decision & Release | If approved, OFAC issues a license or removes the designation; the holding institution releases the assets | Days after decision | Ensure institution receives official OFAC authorization |
OFAC License for Releasing Blocked Assets
Even while a party remains on the SDN List, OFAC can grant a specific license authorizing particular transactions with or involving blocked assets. Specific licenses are highly tailored — they authorize only the transaction described in the application. Common bases for specific licenses related to blocked assets include:
- Humanitarian purposes — e.g., medical care, food, or legal fees
- Unblocking to a non-sanctioned third party — transferring assets to a non-sanctioned owner
- Liquidating a business — winding down a company with blocked assets in an orderly manner
- Inheritance releases — distributing estate assets to non-sanctioned heirs
- Authorized legal settlements — paying judgments or settlements involving blocked parties
OFAC processes specific license applications on a rolling basis. While average review times vary by program and complexity, straightforward applications can be resolved in 3–6 months, while complex cases may take 12–24 months or longer.
What Happens If OFAC Denies the License or Delisting Petition?
If OFAC denies a license application or rejects a delisting petition, the owner of blocked assets has several options:
- Request reconsideration with additional evidence or legal arguments
- Challenge the blocking in U.S. federal court under the Administrative Procedure Act (APA) — courts have overturned improper OFAC designations
- Engage Congress — in high-profile cases, Congressional pressure has resulted in OFAC reconsideration
- Apply for an alternative license covering a narrower purpose, such as using blocked funds to pay for legal fees to fight the designation
It is important to understand that the assets do not revert to the government simply because OFAC blocked them. They remain legally owned by the original owner — the blocking simply prevents access. For this reason, persistent legal advocacy is worthwhile even when initial applications are denied.
Timeline Expectations for Releasing Blocked Assets
One of the most frequent questions we receive from clients is: how long will it take to release my blocked funds? The honest answer depends heavily on the specific sanctions program, the nature of the block, and the legal strategy deployed.
- Simple administrative blocking error (false positive SDN match): can sometimes be resolved in 2–8 weeks with OFAC clarification
- Specific license application (non-SDN listed party seeking transaction authorization): typically 3–6 months
- SDN delisting petition: typically 12–24 months, sometimes longer for complex programs
- Federal court challenge: 2–4 years, but can create negotiating leverage for faster OFAC resolution
For companies and individuals dealing with significant blocked funds, exploring all available pathways simultaneously — rather than sequentially — significantly accelerates the process. Our guide on what it means to be sanctioned and our page on OFAC penalties provide important context for understanding your full legal exposure.
Frequently Asked Questions About OFAC Blocked Assets
Can OFAC confiscate blocked assets permanently?
Blocking is not the same as confiscation. OFAC can freeze assets indefinitely, but actual forfeiture requires a separate legal proceeding. However, assets can remain blocked for years or even decades in extreme cases, which is why active legal advocacy to secure release is critical.
Do I need to report blocked assets?
Yes. Any U.S. person or entity that holds blocked property must report it to OFAC within 10 business days of the blocking, and then annually by September 30 each year. Failure to report is itself a sanctions violation.
Can foreign banks block my assets under OFAC rules?
Foreign banks with U.S. dollar correspondent relationships are effectively subject to OFAC compliance requirements. Any transaction denominated in USD that routes through a U.S. correspondent bank can be intercepted and blocked, even if neither party to the transaction is U.S.-based.
Get Expert OFAC Legal Help
Our sanctions lawyers have handled 500+ OFAC cases including complex blocked asset releases. We know how to navigate OFAC’s processes to get your funds released as quickly as possible. Contact us for a free consultation.
Frequently Asked Questions
What does it mean when OFAC blocks assets?
When OFAC blocks assets, it means that funds, property, or other assets subject to U.S. jurisdiction are frozen and cannot be transferred, withdrawn, exported, or otherwise dealt with. U.S. financial institutions that hold blocked assets are required by law to report them to OFAC. The asset owner cannot access their property until OFAC grants a license authorizing release or the underlying sanctions designation is removed. Our attorneys pursue both delisting and asset release on parallel tracks.
Which assets can OFAC block?
OFAC can block any asset within U.S. jurisdiction, including: bank accounts held at U.S. or foreign banks with U.S. correspondents, real estate located in the United States, securities held in U.S. brokerage accounts, intellectual property rights, ownership interests in U.S. companies, and any other property interest. OFAC can also block assets of companies that are 50% or more owned by a designated person, even if the company itself is not individually listed.
How can I get my OFAC blocked assets released?
Releasing OFAC blocked assets requires either obtaining an OFAC-specific license authorizing the transaction or, if you believe the blocking is erroneous, challenging the underlying designation through an administrative petition. Our attorneys analyze the legal basis for the block, determine the optimal path to release, prepare the necessary applications or petitions, and manage all OFAC communications. In urgent cases involving humanitarian needs, we can apply for expedited review.
How long can OFAC keep assets blocked?
OFAC can maintain asset blocks indefinitely as long as the sanctions designation or program remains in effect. There is no automatic expiration. Assets remain blocked until OFAC issues a specific license authorizing their release, the sanctioned person is successfully removed from the SDN list, or the sanctions program under which the block was imposed is terminated by executive order. Legal challenges can significantly accelerate the release timeline.
Can I receive interest on OFAC blocked funds?
Yes. Under OFAC regulations, blocked funds held in interest-bearing accounts continue to accrue interest at the prevailing rate. The financial institution holding the blocked funds must maintain them in a separate blocked account and report them annually to OFAC. Our attorneys ensure that your blocked funds are properly accounted for and that you recover all accrued interest when the assets are ultimately released.