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U.S economic sanctions issued by the Office of Foreign Assets Control (OFAC) can be highly disruptive to your personal and professional life. Suddenly, your bank accounts can be frozen, international transactions blocked, contracts stolen and business partners backing out of deals. These sactions make it hard for indivudlas to access the own funds, travel freely or maintain a good reputation.
The reality is that US sanctions are unforgiving and the ripple effects can be felt even bt innocent family members related to targeted individuals. OFAC violations can lead to civil penalties, criminal charges and permanent reputational damage. That’s where OFAC sanctions lawyers come in.
With the right legal guidance, you can apply for OFAC licenses that allow certain transactions, seek removal from sanctions list and negotiate with regulators to protect your assets. Instead of navigating this complex legal process alone, our experienced OFAC lawyers ensure compliance, builds a strong case for removal from OFAC lists and secures your future.
What is OFAC?
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is responsible for implementing economic policy and monitoring sanctions measures against foreign entities, individuals and states. OFAC regulations play an important role in ensuring U.S. national security and enforcing the international sanctions system. That includes measures against terrorism, the proliferation of weapons of mass destruction, human rights violations, and other threats.
OFAC operates in accordance with international policy and the economic interests of the U.S. government and performs the following key functions:
- Development and implementation of economic sanctions programs.
- Compilation and updating of lists of persons subject to special control measures (OFAC list or SDN List);
- Issuance and oversight of OFAC licenses for authorized actions with sanctioned persons or organizations;
- Monitoring compliance with sanctions laws by companies, banks, and individuals in the U.S.;
- Investigation and imposition of sanctions for violations of the sanctions law.
OFAC’s activities are governed by U.S. laws and presidential decrees, such as the Trading with the Enemy Act (TWEA), International Emergency Economic Powers Act (IEEPA), United Nations Participation Act, as well as other presidential decrees establishing specific sanctions measures. These laws give OFAC broad powers to freeze assets, restrict transactions, and monitor international activities of U.S. companies and foreign companies under U.S. jurisdiction.
OFAC was officially established in 1950 in response to the Korean War, when President Harry Truman froze the assets of China and North Korea. However, its predecessor, the Foreign Funds Control Division, began operations as early as 1940. Since then, OFAC has become one of the most influential divisions of the U.S. Department of the Treasury, with global jurisdiction and close cooperation with the State Department, CIA, FBI, the U.S. Federal Reserve, and international banks.
OFAC Jurisdiction
OFAC sanctions apply to:
- All individuals and legal entities within the U.S., including U.S. citizens, Green Card holders, legal entities registered in the U.S., foreign companies doing business in the U.S., branches, and representatives of American companies abroad.
- All citizens and legal entities under U.S. jurisdiction, including those abroad, companies registered in the U.S. but operating overseas, as well as foreign companies with partial American ownership.
Even if all parties in a transaction are outside the U.S., the transaction may fall under OFAC control if:
- U.S. dollars (USD) are used. Any transaction in dollars must pass through U.S. intermediary banks, which are under U.S. government control. This means that a foreign company transferring dollars between two foreign banks is directly involved in the U.S. financial system.
- U.S. banks, payment systems, or financial intermediaries are used. Even if the main payment is made in another currency, a transaction via the SWIFT system, a payment provider, or a bank with a U.S. branch may be monitored by OFAC.
- U.S. technologies or software are used, such as equipment supply, cloud services, or IT services from the U.S.
- The transaction involves blocked persons or companies listed on OFAC’s SDN List (Specially Designated Nationals). Foreign entities must avoid transactions involving persons or companies in the OFAC sanctions list. Any interaction with U.S. jurisdiction in violation of the law may lead to fines, asset freezes, and secondary sanctions.
OFAC applies both targeted sanctions and broad sanctions against entire foreign countries. Foreign governments under full or partial restrictions include Iran, North Korea, Cuba, Syria, Russia, and Venezuela. Even partial involvement of companies from these countries or conducting transactions related to them requires obtaining an OFAC license or may be considered a violation of sanctions law.
Types of OFAC Sanctions
OFAC sanctions have different structures, levels, and legal consequences. Effective risk management requires understanding the types of sanctions applied and how they affect your activities. Below is a table with the main types of OFAC sanctions.
| Type of Sanction | Description | Examples and Features |
|---|---|---|
| Country-Level Sanctions | Broad economic sanctions against a country. Complete prohibition on doing business, economic, and financial activities with that country. | Include asset freezes, import/export bans, and any financial operations with persons or legal entities from that country without OFAC authorization. Examples: Iran, North Korea, Cuba, Syria. |
| Personal Sanctions (Smart Sanctions) | These sanctions are aimed at specific individuals, organizations, or companies. Restrict interaction with the target without banning business with the entire country. | Reduce impact on civilians, implemented through the SDN List. Examples: sanctions against businesspeople, officials, and banks involved in money laundering or cyberattacks. |
| Sectoral Sanctions | Restrictions on activity in specific sectors, such as energy, defense, finance, and technology. | Limit economic activity like funding, investment, and technology exports in a particular sector. Examples: sanctions against oil and gas companies, banks in Russia, and Venezuela. |
| Secondary Sanctions | Sanctions against companies or foreigners outside U.S. jurisdiction interacting with sanctioned entities. | Used to pressure third countries. Risks: restricted access to the U.S. financial system, inclusion on the SDN List, asset freezes. Example: a foreign bank servicing a company in Iran may face secondary sanctions. |
With extensive experience dealing with OFAC-related matters, we help sanctioned individuals and companies secure their freedome, finances and reputations. Our OFAC attorney will help you with risk analysis and counterparty checks against SDN and SSI lists, transaction monitoring for compliance, submission of OFAC license applications, sanction challenges and client representation. We also help businesses involved in international operations to develop internal compliance programs according to OFAC standards.
What is an OFAC License?
A OFAC license is the official authorization to complete financial transactions that would be otherwide prohibited by sanctions. With a license, interactions with blocked persons or organizations in the OFAC sanctions list can lead to civil and criminal penalties like fines, asset freezes and blocked operations.
A license is required in the following cases:
- Doing business with persons on the SDN list
- Investing in countries under full or partial sanctions regulations
- Transferring funds, goods, or services to persons in sanctioned regions
- Unlocking assets frozen under OFAC regulations
- Selling or transferring equipment, software, or technology in jurisdictions under sanctions
- Transferring donations, humanitarian aid, or funds to relatives in sanctioned countries
Here are two main types of OFAC licenses:
Specific License
OFAC specific licenses are issued to authorize financial transactions with blocked individuals, foreifgn companies and other entities. This OFAC license is issued after analyzing the evidence and circumstances of the transactions.
A specific license is neccessary for OFAC compliance in the following circumstances:
- The operation isn’t covered by OFAC general licenses
- Business with companies or persons listed on the SDN List is required
- Transfer of technology, capital, investment, or other resources to sanctioned organizations is planned
- Previously frozen assets need to be unlocked
- Transactions started before sanctions took effect must be completed
OFAC reviews each request on a case-by-case basis.
General License
OFAC general licenses are published to authorize transactions related to humanitarian activities like providing food, medical supplies and communication services to sanctioned countries. General licenses are necessary to:
- Specify the list of permitted actions under a particular sanctions program
- Do not require individual OFAC approval
- Are usually related to humanitarian aid, medical supply delivery, fund transfers to relatives, and support for non-profit organizations
Check whether your operation is covered by a general or specific license before submitting a request.
How to Obtain an OFAC License
Before submitting a request, it is recommended to ensure that your operation falls under OFAC sanctions regulations and that an existing general license does not cover your situation. Each request is reviewed individually, so it is necessary to provide the most accurate and complete information, including:
- Description of the transaction or operation you plan to perform
- Parties involved in the transaction, including full legal names, addresses, registration, and status of persons/organizations
- Purpose and objectives of the transaction, including economic, humanitarian, or other grounds
- Contracts, invoices, receipts, draft agreements, or other supporting documents
- Legal grounds explaining why the operation should be authorized
- Additional explanations regarding payment structure, financial routes, and currency used (especially when using U.S. dollars)
All documents must be in English or accompanied by a notarized translation into English.
The request can be submitted via the OFAC Licensing Application System (OLAS) online platform. Registration on OLAS allows you to track the review status, submit additional documents, and receive notifications directly from OFAC. The online platform is aso useful when submitting multiple applications to avoid potential violations.
Mailing address for submitting the request:
Office of Foreign Assets Control
U.S. Department of the Treasury
Treasury Annex
1500 Pennsylvania Avenue, NW
Washington, DC 20220 USA
The review period for an individual license depends on the complexity of the case, the number of parties and jurisdictions involved, and the completeness of the submitted documents. It usually takes 2 to 6 months. During this time, OFAC may request additional documents or clarifications, so having an expert for prompt responses is important.
Upon approval, you will receive an official letter specifying the involved parties, authorized actions, license validity period, and usage conditions (reporting, amount, and currency limits). OFAC sanctions violations may result in license revocation and secondary sanctions.
Our team provides comprehensive OFAC services, including:
- Transaction review to assess license requirements
- Preparation and submission of requests
- Status tracking in OLAS and interaction with OFAC
- Consultations on license conditions and compliance
- Client rights protection in case of denial or regulatory review
Who Should Submit an OFAC License Request?
Export-Import Companies
A license is required when exporting or importing goods/services to sanctioned countries, including supplying equipment or technologies under U.S. control (EAR, ITAR), as well as transactions with SDN-listed persons or organizations.
Banks and Financial Institutions
An OFAC license is required for fund transfers to sanctioned persons, account servicing for SDN clients, unlocking frozen funds, and U.S. dollar transactions, even if both sender and recipient are outside the U.S.
Insurance Companies
An OFAC license is needed for insurance payouts to persons or organizations in sanctioned jurisdictions, as well as for contracts with insured persons from sanction lists.
Individuals
A license may be required for:
- Transferring inheritance to sanctioned countries
- Real estate transactions if one party is on the SDN list or a sanctioned country
- Transfers to relatives in sanctioned countries
- Paying for education or medical services for persons in sanctioned regions
How to Remove a Name from the OFAC SDN List
First, verify that you or your organization is indeed on the OFAC sanctions list by checking the official website. If the name is on the SDN list, an official removal request (delisting petition) must be submitted.
The removal request is sent to the OFAC Office of Global Targeting (OGT) in writing and must include:
- Applicant identification details (name, company, contact information)
- Proof of identity and authority to file on behalf of the organization
- The removal request with a clear explanation
- Supporting documents such as financial reports, company charters, letters terminating relations with sanctioned persons, or legal opinions
The request must be in English and structured legally, comparable to submissions to U.S. government bodies.
Possible outcomes: approval (person or company removed from SDN), partial satisfaction (sanctions limited in certain aspects), or denial (OFAC rejects the request with reasons). If the result is unsatisfactory, the applicant may submit a new request with new information or appeal to a U.S. court in case of procedural violations.
The explanation should emphasize the cessation of prohibited activities, termination of relations with sanctioned persons, changes in ownership, business profile changes and cooperation with law enforcement or regulatory bodies. Simple denial is insufficient — evidence and proper legal submission are required.
Looking for an OFAC Sanctions Attorney?
Are you a target of OFAC investigations for alleged violations of U.S economic sanctions or planning to transact with SDN-listed persons? In such cases, you need an OFAC sanctions lawyer to act legally and minimize risks like asset freezes or fines.
Our legal team has experience in sanctions law and provides a full range of OFAC services, including:
- Risk analysis and advice on U.S. sanctions applicability in your situation
- Counterparty checks against SDN, SSI, and other sanction programs
- Preparation and submission of Specific License requests
- Preparation and submission of SDN delisting petitions with coordination with OFAC
- Protection of client rights in case of asset freeze, license denial, or investigation
- Developing effective compliance programs
Whether you’re facing an OFAC administrative subpoena or sanctions compliance matters, you’ll need lawyers with extensive experience in the U.S foreign policy. Our law firm delivers a strong sanctions defense to avoid frozen assets, operational restrictions and reputation damage. We handle all legal stages so you can fully focus on growing your business.
FAQs
What is a Specific OFAC License and When is it Required?
A specific license is an individual license issued in accordance with OFAC enforcement regulations to authorize transactions usually prohibited by sanctions. This license is required to conduct transactions with an SDN-listed legal entity, carry out transactions with a sanctioned country, or unblock frozen assets. Without this license, the transaction will be considered a violation of U.S. law.
How Long Does OFAC License Review Take?
Once the application process is done, the review times depend on case complexity and the volume of submitted documents. On average, it takes 2 to 6 months, but it can take over a year for confidential jurisdictions. Preparing complete documentation and promptly responding to OFAC inquiries can speed up the process.
Can Non-U.S. Persons Apply for an OFAC License?
Yes, non-U.S. persons can apply for a license if their activities are related to U.S. jurisdiction, such as using U.S. dollars, U.S. banking, technologies, or involving U.S. citizens in transactions. OFAC will review applications like those from U.S. citizens, provided the application is lawful and has proper legal grounds.
How Can I Check the Status of My OFAC License Application?
If you apply through the OFAC Licensing Application System online, you can track its status in your account. For offline submissions, you can also contact OFAC via email or regular mail. If working through an attorney, monitoring the application status and interacting with OFAC will be handled by the attorney.
What Should I Do If My Company Is Subject to OFAC Sanctions?
First, immediately stop any actions that may violate sanctions rules. Then consult a lawyer to analyze the situation for risk assessment. This may require licensing, delisting, or developing a compliance program. Independent actions without understanding U.S. sanctions law may worsen the situation, leading to fines and asset freezes.
