One of the most devastating things that can happen to a company or an individual is to find that they have been placed on a Specially Designated Nationals (SDN) list by the Office of Foreign Assets Control (OFAC). All of a sudden, they are cut off from the American banking system and most likely, their own banks. Their business quickly evaporates. Worst of all, OFAC does not explain how it happened or what evidence was used to destroy someone’s life or business.
OFAC makes its decisions based upon information it receives from a variety of sources, including classified sources. If the information OFAC received is inaccurate, incomplete or misleading, a party can wrongfully be placed on the list. Also, a party that was properly placed on the SDN list may have changed ownership, personnel or policies such that it should no longer be on the list.
The decision to place a company or a person on the list occurs without any prior notice or opportunity to object. The party’s name simply appears on the list. Even worse, there is no formal process or procedure for removing a party from the list and very little effective judicial review of OFAC’s determinations. There are, however, steps that can be taken to remove a company or an individual from the SDN list.
The first thing that a party seeking to challenge its listing must do is secure counsel to represent it. This is more difficult than one would think because counsel cannot simply begin representing someone on the SDN list. The attorney must first obtain a special license permitting the attorney to represent the client. This first step can be time consuming.
Once OFAC has granted a special license permitting an attorney to represent the party on the SDN list, the attorney must conduct an investigation to determine why the party was placed on the SDN list. The attorney must then martial evidence to show that OFAC was wrong or that the circumstances with the party placed on the list has changed. When all the evidence has been assembled, it must be presented to OFAC with a request for removal from the list. OFAC indicates that it has no “pre-determined timetable” but that names are added to or removed from the SDN lists “as appropriate”. The good news is that a significant number of names, more than 1,300, have been removed from the list. The bad news is that the process can take years for OFAC to complete.
Please contact us if you have questions about an SDN listing or possible removal.