Blocked assets are funds or property that have been frozen due to economic sanctions imposed by authorities such as OFAC. This freezing prevents sanctioned individuals or entities from accessing or using the assets, thus hindering their financial operations and business activities.
When an individual’s or entity’s money, property, and bank accounts are blocked by OFAC, it means their assets are effectively frozen due to their involvement in or support of illicit activities such as terrorism, narcotics trafficking, or weapons proliferation. The blocked assets can no longer be accessed or used by the sanctioned party, significantly hindering their financial operations and business activities.
Blocked funds are usually placed in an interest-bearing account with specific properties that ensure compliance with economic sanctions regulations. The most distinctive feature of these accounts is that, under the sanctions regulations, once the funds are transferred into the blocked accounts, no one is allowed to access the money, except for the bank under very limited circumstances, such as maintenance of the account. These funds cannot be touched without explicit specific license authorization from OFAC.
The blocking of assets can create significant difficulties for the affected party, particularly if the blocking occurs due to an error or misunderstanding. Even if a financial institution realizes a mistake was made, they do not have the power to unblock the funds until OFAC grants authorization. To unblock the funds, the sanctioned party must file an unblocking application with OFAC, providing all necessary information and demonstrating that the blocking was inappropriate based on the specific transaction. The release of blocked assets can be a lengthy and complicated process, often requiring expert legal assistance to navigate the challenges and submit a persuasive unblocking application.
OFAC subpoenas, investigations, or violations can potentially have an impact on an individual’s immigration status. Although OFAC’s primary function is to enforce economic sanctions against individuals and entities involved in illicit activities, a connection to such activities or violations could raise concerns about an individual’s admissibility or eligibility for certain immigration benefits.
When an individual applies for an immigration benefit or seeks entry to the United States, they are subject to various background checks and assessments to determine their admissibility. If an individual is found to have links to terrorism, narcotics trafficking, or other activities targeted by OFAC sanctions, it may raise red flags during the immigration process. Such connections could lead to the denial of immigration benefits, such as visas, green cards, or citizenship, as well as possible removal proceedings.
Furthermore, if an individual is subjected to an OFAC investigation or found to have violated economic sanctions, it could potentially result in criminal charges, depending on the nature and severity of the violation. Convictions for criminal offenses may have serious immigration consequences, including deportation, ineligibility for relief from removal, or disqualification from naturalization.
Given the potential implications of OFAC subpoenas, investigations, or violations on an individual’s immigration status, it is crucial for those affected to seek legal advice from both sanctions and immigration experts. A comprehensive understanding of the complexities surrounding OFAC sanctions and immigration law can help navigate the challenges and mitigate the potential risks to one’s immigration status.
There are several common mistakes that can lead to someone being served a subpoena, including, but not limited to, lack of proper compliance with regulations, inadequate due diligence, and unintentional associations with sanctioned entities or individuals.
One common mistake is the failure to comply with relevant laws, rules, and regulations. This can result from a lack of understanding of the applicable requirements, inadequate internal compliance programs, or insufficient training for employees. Non-compliance with regulations, such as anti-money laundering (AML) or export control laws, can lead to authorities issuing subpoenas to gather more information about potential violations.
Another mistake is inadequate due diligence when engaging in transactions or business relationships. Companies and individuals may not thoroughly investigate the parties they are dealing with, resulting in unintentional dealings with sanctioned entities or individuals. This lack of proper due diligence may lead to a subpoena being issued as part of an investigation into potential violations of economic sanctions or other related laws.
Unintentional associations with sanctioned entities or individuals can also result in subpoenas. For example, if a person unknowingly conducts business with a sanctioned individual or entity, they may find themselves subject to a subpoena as authorities investigate the extent of their involvement and potential violations of sanctions. This can be particularly challenging for businesses operating in high-risk jurisdictions, where it may be more difficult to identify and avoid dealings with sanctioned parties.
Finally, human errors, such as incorrect or incomplete information submitted in required reports or forms, can also lead to subpoenas. These errors may arouse suspicion or prompt further investigation by regulatory authorities, which may then issue a subpoena to obtain additional information and clarify the situation.
To minimize the risk of being served a subpoena, it is crucial for individuals and businesses to establish robust compliance programs, conduct thorough due diligence, and ensure that employees are well-trained in relevant laws and regulations. Seeking expert legal advice can also help navigate the complexities of regulatory compliance and mitigate potential risks.
