Petitioning OFAC to Unblock Funds or Assets

Petitioning OFAC to Unblock Your Funds or Assets

Having your funds or assets blocked by the Office of Foreign Assets Control (OFAC) can be an incredibly frustrating situation. Not being able to access your own money or property is a major hardship for most people or businesses. The good news is that OFAC does allow for petitioning to get your funds or assets unblocked through a specific licensing process. This article will walk you through everything you need to know about petitioning OFAC to release your blocked funds or assets.

What is OFAC and How Do They Block Assets?

OFAC is an office within the U.S. Department of Treasury that administers and enforces economic and trade sanctions against foreign countries, entities, and individuals. Their goal is to carry out U.S. foreign policy and national security objectives. OFAC has the power to designate certain entities as “Specially Designated Nationals” (SDNs). Any property or assets belonging to SDNs are considered “blocked” under OFAC regulations.

For example, if you tried to wire money to someone who has been designated an SDN, that transfer would be blocked and the funds seized. The same thing can happen if you receive a wire from an SDN, even if you didn’t realize who you were transacting with. In some cases, assets can even be blocked if they are linked to or derived from dealings with SDNs [1].

OFAC has the authority to block transactions and freeze assets under several different sanctions programs targeting countries like Iran, North Korea, Syria, and regions such as the Crimea region of Ukraine. They also block assets related to terrorism, narcotics trafficking, proliferation of weapons of mass destruction, and other threats to national security.

Petitioning for the Release of Blocked Funds

If your funds or assets have been blocked by OFAC, you have the right to request they be unblocked or released. This requires petitioning OFAC through a specific license application process. Specific licenses allow for exceptions to the blocking rules on a case-by-case basis.

According to OFAC, “The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. Each year, OFAC removes hundreds of individuals and entities from the SDN List.” [2].

Some key things to know about petitioning to release blocked funds:

• You must file a specific license application and make your case for why the funds should be unblocked
• There is no guarantee OFAC will approve your request
• Each case is reviewed individually on its merits
• OFAC aims to be transparent about the review process and licensing decisions
• Having a sanctions lawyer assist greatly improves your chances

How to File an OFAC License Application

To start the process of requesting the release of blocked funds or assets, you need to file a specific license application with OFAC. There are a few ways this can be done:

1. File an electronic application through OFAC’s website – This is the preferred method. You can file a web form detailing the who, what, when, where, why related to your blocked transaction and funds. OFAC encourages filing online applications for blocked funds cases. [3]
2. Print and mail a license application form – You can download the paper application from the OFAC website, fill it out, and mail it in. This is more time consuming.
3. Email a letter request – For certain limited cases, you can email a letter to OFAC requesting the specific license and explaining the details.

Your license application should include as much information as possible, such as:

• Your full legal name and contact information
• Information about the blocked transaction – dates, amounts, parties involved
• Reasoning for why the funds should be released
• Supporting documentation – bank records, correspondence, contracts, invoices, etc.

Be thorough and make a compelling case in your application. The more details and evidence you can provide, the better. Having an experienced sanctions lawyer draft the license request is highly recommended, as they will know how to frame the arguments in a persuasive way.

Specific Details Needed for Blocked Funds Transfers

If your situation involves an blocked funds transfer or wire transaction, the license application process has some unique requirements:

• You should explain the nature of the transaction – who sent it, who was meant to receive it, through which banks, etc.
• Provide transaction records like SWIFT messages, payment confirmations, bank statements, and any other relevant documentation
• Include an explanation for why the funds transfer should not have been blocked
• Provide new payment instructions for where the funds should be sent if released

Essentially, you need to give OFAC a full picture of what happened and make your best case for freeing up the funds. Having concrete evidence like bank records is vital. OFAC specifically encourages online license applications for blocked funds transfer cases. [4]

What to Expect After Filing Your OFAC License Application

Once you submit your specific license application, here is general guidance on what to expect next:

• OFAC will review your request – This may take weeks or even months depending on the complexity.
• You may receive additional questions or document requests from OFAC – They frequently ask for more details or documentation to vet the case.
• OFAC will conduct interagency research – They coordinate with other government agencies to gather information.
• You will eventually receive a formal response – This could be an approval, denial, or request for more information.
• Approved licenses often come with conditions – Terms you must comply with to use the released funds.
• Denied requests can be appealed within 30 days – Though appeals are still a long shot.
• The process typically takes a minimum of 2-3 months – More complex cases can drag on much longer.

Try to be patient as OFAC reviews your license application. They receive a high volume of requests. Keep in mind their mandate is national security, not processing petitions quickly. Having an experienced OFAC attorney can help speed things up.

What to Include in Your License Application

Crafting a persuasive license application is critical if you want to convince OFAC to release your blocked funds or assets. Here are some tips on what to include:

• Background information – Explain who you are, your business or occupation, where you are located, and a brief history of your situation.
• Transaction details – Thoroughly describe the activity that triggered the blocking, including dates, amounts, parties, banks, etc.
• Reason for release – Make your strongest case for why the funds should be unblocked, with supporting evidence.
• Intended use of funds – Outline what you intend to do with the money if released and why that aligns with OFAC’s goals.
• Documentation – Bank records, contracts, invoices, correspondence, or anything that supports your position.
• New payment instructions – If requesting release of blocked funds transfer, provide updated wire instructions.

Always be truthful in your OFAC application, as any deception could lead to criminal penalties. Be detailed yet concise. And explain how authorizing the release upholds the broader mission of OFAC sanctions programs.

Common Reasons Funds Get Blocked by OFAC

If your assets have been frozen by OFAC, it helps to understand some of the common scenarios that lead to blocking actions:

• Transactions with sanctioned countries – Any transfers involving countries under OFAC sanctions like Iran, North Korea, Syria, Crimea, Cuba, etc. will be blocked.
• Dealings with SDNs – Transactions with named Specially Designated Nationals individuals or entities on the OFAC list will be seized.
• False positives – In some cases, funds are blocked mistakenly such as similar name mix-ups.
• Indirect connections – Transactions associated with sanctioned parties get flagged, even if indirect.
• Forfeitures – Illegal activity like money laundering can prompt asset seizure.

If you believe your funds were blocked erroneously, make that clear in your license application and provide evidence. For indirect connections, explain the loose association and how it doesn’t justify blocking based on OFAC guidance.

Key Reasons OFAC May Deny Your Request

While OFAC does grant many license applications, they also deny a fair number of requests. Some common reasons your petition to unblock funds could get rejected include:

• Insufficient information provided
• Inability to verify statements and documentation
• Funds tied to sanctioned parties like SDNs
• Transaction violates national security interests
• Funds linked to criminal activity
• Petitioner located in sanctioned country
• Deceptive or contradictory information

Avoid these pitfalls when filing your application. Make sure you include extensive details and documentation that OFAC can easily verify. Be 100% truthful. And clearly explain how releasing the assets aligns with OFAC’s goals, not just your own interests.

Can You Get Help With Your OFAC License Request?

Technically, anyone can petition OFAC directly to release blocked property and funds. However, your chances of success greatly improve when you have an experienced OFAC attorney assist with the process.

The laws and regulations governing OFAC licensing are complex. There are nuances to presenting a persuasive case that laypeople may miss. An attorney who specializes in OFAC cases will know exactly what information to include, what details to emphasize, and how to construct effective arguments.

They can advise you on which type of license to pursue, help collect documentation, and ensure you submit a complete application. If your initial request gets denied, a lawyer can file an appeal and represent you in interactions with OFAC. Their expertise significantly improves the odds your petition will succeed.

What Happens if OFAC Approves Your Request?

Getting your blocked funds released is a huge relief, but it’s not always the end of the road. Here is what typically happens after OFAC grants your license:

• You will receive a written approval outlining the terms and timeline.
• Any requirements or restrictions will be explained.
• You must comply with all conditions laid out to use the funds.
• OFAC sends banks instructions to release the blocked assets.
• Banks review the license and validate instructions.
• Funds get unblocked and become accessible based on the timeline given.
• OFAC may require follow-up documentation from you on use of funds.

Even once approved, the license process can move slowly as banks confirm instructions and validate transactions. But ultimately you will regain access to your funds or property. Just be sure to closely follow all terms set by OFAC.