OFAC Designation Lawyer

What Does It Mean to Be OFAC Designated?

An OFAC designation — also known as being placed on the SDN list — is one of the most severe financial penalties the US government can impose without criminal conviction. When the Office of Foreign Assets Control designates an individual or entity, the consequences are immediate and sweeping.

Asset freeze. All property and interests in property that are in the United States or in the possession or control of US persons are immediately blocked. Bank accounts are frozen. Transactions are halted without warning.

US persons prohibition. Under OFAC regulations, any US person — including American banks, businesses, and individuals worldwide — is prohibited from transacting with you. This effectively cuts you off from the US-dominated global financial system, impacting dollar-denominated transactions and correspondent banking relationships internationally.

Reputational damage. Designation is public and permanent until reversed. Your name appears on a list associated with narcotics trafficking, terrorism, weapons proliferation, or sanctions evasion. Business partners, financial institutions, and counterparties worldwide will sever ties. The reputational damage can be catastrophic even if the underlying designation was based on flawed intelligence or mistaken identity.

Secondary consequences. Under the 50 Percent Rule, any company that you own 50% or more of — directly or indirectly — is automatically treated as a blocked person. Designation can destroy your entire business network. In 2025 alone, OFAC added 1,764 new persons to the SDN list, covering everyone from Russian energy companies to cartel-linked businesses to individuals accused of sanctions evasion.

Grounds to Challenge an OFAC Designation

Not every OFAC designation is legally sound. Our OFAC designation lawyers identify and develop the strongest available grounds to challenge your listing. Common legal and factual grounds include:

Factual errors. OFAC designations are based on intelligence and evidence that can be wrong. Witnesses may have provided false information. Transactions may have been mischaracterized. Ownership structures may have been misunderstood. If the factual basis for your designation is inaccurate, we build a comprehensive evidentiary record proving it.

Changed circumstances. If the circumstances that justified your designation no longer exist — you have exited a business relationship, a sanctioned entity is no longer sanctioned, or you have taken remedial compliance steps — a reconsideration petition documenting those changes can result in delisting.

Due process violations. While OFAC does not provide advance notice of designation, there are constitutional limits on government action. In some cases, designated parties have successfully challenged their listings in federal court on procedural grounds, particularly where the designation was based on classified evidence the petitioner had no opportunity to contest.

Mistaken identity. SDN list errors happen. Persons with similar names, shared addresses, or corporate affiliations with designated parties are sometimes incorrectly listed. If you have been designated due to mistaken identity, we pursue emergency delisting through OFAC expedited procedures.

Legal basis challenges. Each OFAC sanctions program has specific statutory and regulatory criteria for designation. If OFAC exceeded its authority or failed to meet the legal standard required under the applicable executive order or statute, that provides grounds for administrative and judicial challenge.

OFAC Reconsideration Petition — The Legal Process

The primary mechanism for challenging an OFAC designation is the administrative reconsideration petition governed by 31 CFR 501.807. This regulation provides designated parties — including non-US nationals — with the right to submit a petition asking OFAC to reconsider the designation.

First, your OFAC designation lawyer conducts a comprehensive review of all publicly available information about the designation, including the Federal Register notice and OFAC stated basis for the listing. We identify every factual claim and evaluate the strength of available counter-evidence.

Second, we gather and authenticate documentary evidence: financial records, corporate ownership documents, compliance records, affidavits from witnesses, and expert opinions. The petition must be thorough — OFAC is not obligated to give you a second chance to submit additional evidence after the initial petition.

Third, we submit the formal reconsideration petition to OFAC Office of Global Targeting. The petition must clearly identify all contested facts, provide supporting documentation, and present a coherent legal argument for why the designation should be reversed.

Fourth, OFAC reviews the petition. Typical timelines range from 6 to 18 months. Complex cases involving classified intelligence can take longer. OFAC may request additional information during the review.

Finally, OFAC issues a decision: it will either uphold the designation, modify it, or reverse it and remove you from the SDN list. If OFAC upholds the designation, judicial review in federal court remains an option under the Administrative Procedure Act.

How Our OFAC Designation Lawyers Can Help

Our sanctions law team has represented designated individuals, companies, and financial institutions across more than 40 countries. We provide comprehensive representation throughout the designation challenge process:

Emergency response. If you have just been designated, we provide immediate crisis management: reviewing the designation, advising on asset protection steps within legal limits, and engaging OFAC from day one.

Reconsideration petition drafting. We draft, document, and submit comprehensive 31 CFR 501.807 reconsideration petitions. Our petitions address every factual and legal basis cited by OFAC, supported by authenticated documentary evidence.

Specific license applications. While your reconsideration petition is pending, OFAC may authorize limited activity through specific licenses. We identify and apply for licenses that allow you to maintain essential business operations, pay legal fees, and meet humanitarian needs.

Federal court litigation. When OFAC denies a reconsideration petition, we pursue judicial review. We have experience challenging OFAC designations under the Administrative Procedure Act and on constitutional due process grounds.

Compliance remediation. Demonstrating that you have implemented robust sanctions compliance programs strengthens any reconsideration petition. We advise on the compliance steps most likely to influence OFAC decision.

Parallel delisting strategies. In some cases, a combination of administrative petitions, diplomatic engagement, and voluntary disclosure of relevant information produces the fastest path to removal from the SDN list.

Urgent Action: What to Do If You Have Just Been Designated

An OFAC designation is a financial emergency. Every hour matters. Here is what you must do immediately:

1. Confirm the designation. Search your name and associated entities on the OFAC SDN list at ofac.treasury.gov. Note the exact designation basis, the executive order or statute cited, and the date of designation.

2. Contact an OFAC designation lawyer immediately. Do not speak to government representatives, journalists, or financial institutions without legal counsel. The statements you make in the first 48 hours can affect your reconsideration petition.

3. Do not move or conceal assets. Attempting to transfer, hide, or dissipate blocked assets is a federal criminal offense under IEEPA. Comply with the freeze and document everything.

4. Preserve all records. Gather and preserve all documents related to the transactions, relationships, or activities cited by OFAC. This evidence forms the foundation of your reconsideration petition.

5. Identify all affected entities. Under the 50 Percent Rule, companies you own are automatically blocked. Identify every affected entity immediately so that affected banks and counterparties can be properly notified.

The window for the most effective action is short. Our OFAC designation lawyers are available for emergency consultations 24 hours a day. Contact us now — the sooner we begin building your challenge, the stronger your position will be.