Removal from the Specially Designated Nationals List (SDN List)
Being on OFAC’s Specially Designated Nationals List (SDN List) Can Have Severe Financial and Business Consequences. We Help Foreign Companies and Individuals with Removal
If you are on the Office of Foreign Assets Control’s (OFAC) list of Specially Designated Nationals (SDNs), you likely already have a very clear understanding of the severe financial and business consequences this can cause. Unfortunately, many companies and individuals face unjustified U.S. trade sanctions, and this leaves these companies and individuals needing to fight for SDN list removal.
According to the U.S. Department of the Treasury, “Each year, OFAC removes hundreds of individuals and entities from the SDN list. Each removal is based on a thorough review by OFAC.” As there are tens of thousands of companies and individuals on the SDN list, this makes clear that getting removed from the list is not an easy process. But, under the right circumstances, it can be done. If you need to get yourself or your company off of the SDN list, we encourage you to speak with one of our OFAC lawyers about what we can do to help.
Getting Off of OFAC’s Specially Designated Nationals (SDN) List
The procedures for seeking removal from OFAC’s SDN list are set forth in 31 C.F.R. Section 501.807. Titled, Procedures Governing Delisting from the Specially Designated Nationals and Blocked Persons List, this regulation sets out the general steps involved in filing an application (referred to as seeking “administrative reconsideration”), and provides simply that once OFAC reviews an application, “it will provide a written decision to the blocked person or person seeking the unblocking of a vessel.”
This underscores a key aspect of the process of seeking administrative consideration, or SDN list removal: The outcome of the process is largely up to OFAC’s discretion. While it is possible to appeal a denial of a request for removal in federal court, federal judges will generally defer to OFAC’s judgment, and this is particularly true for matters involving OFAC’s sanctioning authority.
With this in mind, specially designated nationals seeking removal must take a careful, strategic, and informed approach to the process. Simply filing a request for administrative reconsideration with the basic identifying information OFAC requires will not be enough. Instead, SDNs need to present compelling arguments backed by clear evidence, and they must work with their OFAC lawyers to anticipate issues that could lead to a denial.
Understanding the SDN List Removal Application (or “Administrative Reconsideration”) Process
While applying for removal from the SDN list is complicated and time-consuming, the process can largely be divided into four main components. When we represent clients who are seeking SDN list removal, our process involves:
1. Identifying Adequate Grounds for Seeking SDN List Removal
Before moving forward with preparing an application for SDN list removal, it is first necessary to assess an individual’s or company’s grounds for filing an application. As discussed above, OFAC meticulously scrutinizes all applications, and filing an application does not guarantee removal. If an individual or company is unlikely to be successful in seeking removal from the SDN list, then we will work with the company or individual to assess any alternative routes that may be available.
What are the possible grounds for seeking removal from OFAC’s SDN list? While OFAC examines removal applications on a case-by-case basis, some examples of potential grounds include:
- Placement on the SDN list by mistake
- Change in circumstances justifying removal despite past activities
- Change in company ownership
- Remedial steps taken that negate the basis for designation
- Amendment or expiration of OFAC sanction resulting in designation
It is important to be clear that these are just examples. If you believe you may have any grounds for seeking removal from the SDN list, we strongly encourage you to speak with one of our OFAC attorneys about your options.
2. Preparing the SDN List Removal Application
Once we determine that an individual or company has grounds to seek administrative reconsideration from OFAC, the next step is to prepare our client’s application. This is an intensive and collaborative process, as we want to make sure we make the strongest first impression possible with OFAC. Our lawyers work alongside our clients to identify and expand on arguments for removal, collect or generate supporting documentation, and anticipate questions OFAC is likely to answer so that we can streamline the process as much as possible.
3. Taking Discovery and Communicating with OFAC
Upon filing for SDN list removal, specially designated nationals have the opportunity to take a limited form discovery. This can be used to obtain information from the government and private parties that may be relevant to the SDN’s application. While specially designated nationals should generally include as much information with their initial filings as possible, in some cases it will be necessary to take discovery in order to fully prove the grounds for an SDN’s removal.
In addition to taking discovery, we also communicate with OFAC on behalf of our clients once we file their requests for administrative reconsideration. For example, OFAC will frequently issue a questionnaire after receiving an application, and we prepare responses for our clients in writing when necessary, and orally when possible. Oftentimes, having the opportunity to discuss an application before OFAC prepares a questionnaire can significantly reduce the questionnaire’s scope, and this can help pave the way for a successful result.
Beyond responding to OFAC’s questionnaire, our lawyers work with OFAC to address any additional concerns as well as to correct any flawed interpretations or assumptions. When seeking removal from the SDN list based on solid grounds, the key is to ensure clear communication and an accurate mutual understanding of the relevant facts and law.
4. Attending an OFAC Hearing or OFAC Interview
As part of the application process, SDNs can request a hearing or interview with OFAC. Both of these have the potential to be extremely beneficial, and requesting a hearing or interview helps avoid the possibility of OFAC denying an application based on the documents alone. When it is in our client’s best interests to attend a hearing or interview, we help our client prepare thoroughly, and we appear with our client so that we can interject as warranted.
FAQs: Applying for Removal from OFAC’s List of Specially Designated Nationals (SDNs)
How Long Does it Take to Get Removed from OFAC’s List of SDNs?
The SDN list removal process can take a long time. Applicants should generally expect the process to take a minimum of six months, although it could potentially take several years. By submitting a comprehensive application with all necessary supporting documentation, specially designated nationals can often reduce the timeline significantly, as questions from OFAC and requests for additional documentation are most often responsible for delays.
Do I Need a Lawyer to Apply for SDN List Removal with OFAC?
While foreign nationals have the option of representing themselves before OFAC, this approach is inadvisable for several reasons. Most significantly, filing a successful application for SDN list removal is not an easy process. At a minimum, mistakes and oversights will lead to lengthy delays. However, SDNs who attempt to represent themselves are far more likely to face denials, and they will most likely find themselves needing to engage legal counsel years down the line.
What Are the Requirements for SDN List Removal?
There are no established standards or requirements for SDN list removal. Instead, OFAC considers all requests for administrative reconsideration on their individual merits. With that said, there are some generally recognized grounds for removal (i.e., mistaken identity or change in the pertinent OFAC sanctions), and SDNs should work with experienced legal counsel to assemble a compelling application for submission to OFAC.
What Legal Standard Governs Requests for Administrative Reconsideration of SDN Designation?
When evaluating specially designated nationals’ requests for administrative reconsideration, OFAC applies a “reasonable cause to believe” standard. If OFAC agents determine that they have reasonable cause to believe a specially designated national should remain on the SDN list, then they will deny the SDN’s application.
Can I File an Appeal if OFAC Denies My Application for Removal from the SDN List?
If OFAC has denied your application for removal from the SDN list, you should speak with a lawyer about the options you have available. Most likely, challenging your denial will involve seeking reconsideration from OFAC or restarting the application process. While going to court is an option, federal judges are generally hesitant to second-guess OFAC’s decisions in sanctioning matters. Our lawyers can examine OFAC’s grounds for denial and help you determine your best path forward.
Speak with a Lawyer at Oberheiden P.C. about Applying for SDN List Removal
To find out if you are eligible to apply for removal from OFAC’s Specially Designated Nationals List, schedule a complimentary initial consultation at Oberheiden P.C. Once you contact us, we will arrange for you to speak with one of our lawyers in person or over the phone in complete confidence. You can reach us by phone at 888-680-1745 or request an appointment online 24/7.