On April 20, 2017 the Department of Treasury’s Office of Foreign Assets Control (OFAC) offered new guidance for individuals and entities (and their counsel) who seek to have their names removed from OFAC’s list of Specially Designated Nationals (SDN).
The guidance comes in the form of updates to OFAC’s Frequently Asked Questions and sets forth the procedures for petitioning for removal from the SDN list. The petition itself appears quite simple. In fact, the only requirements are that it include: (1) the name and contact information of the SDN; (2) the date of the relevant OFAC listing action; and (3) a “detailed description” of the reasons that individual or entity should be removed from the SDN list. Parties may also submit additional evidence or argument as to why the SDN designation is not appropriate.
While OFAC notes that all petitions are unique, OFAC announces a goal to send its first questionnaire within 90 days of receiving a petition. The time a party takes to respond to the questionnaire (and any subsequent questionnaires) can, of course, significantly draw out the overall petition process.
Although individuals may submit their own petitions, hiring proper counsel is likely a wise decision. Not only can knowledgeable counsel navigate the grounds on which OFAC is likely to remove a person from the SDN list (i.e., positive change in behavior, change in the basis for the designation, mistaken identity, or death), counsel can help ensure that information disclosures will comport with OFAC’s expectations (ideally limiting the number of follow-up questionnaires).
Counsel should be cautioned not to run afoul of OFAC’s sanctions regimes while representing an SDN. Although there are general licenses under most of OFAC’s sanctions regimes permitting legal services to aid a person in contesting SDN status, restrictions on the origin of payments may complicate matters.
New clarity on the path off of the sanctions black list is encouraging evidence of OFAC’s commitment to ensuring that the SDN list encourages good behavior and is not a heavy-handed punishment. While the reality of the petition process may not be as simple as the FAQ suggests, clear guidelines are a great aid to targeted individuals and their counsel.