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OFAC Sanctions Attorney

Legal Assistance With Blocked Accounts, SDN Matters and OFAC Investigations

Arkady Bukh Law Firm represents individuals, business owners, executives, financial professionals and companies in matters involving the U.S. Department of the Treasury’s Office of Foreign Assets Control.

An OFAC issue may arise when:

  • A bank freezes an account
  • An international transfer is blocked or rejected
  • A payment is stopped by a correspondent bank
  • A customer or business partner appears to match an OFAC sanctions-list entry
  • A company may be owned by one or more blocked persons
  • Cryptocurrency is restricted by an exchange
  • OFAC sends an administrative subpoena or request for information
  • A person or company is designated on the SDN List
  • Federal authorities investigate possible sanctions evasion
  • A client needs authorization to release or transfer blocked property

The firm provides representation involving:

  • Blocked bank accounts and payments
  • Rejected funds transfers
  • OFAC specific license applications
  • Analysis of general licenses
  • SDN List designations
  • Delisting and administrative reconsideration requests
  • False-positive sanctions-list matches
  • OFAC’s 50 Percent Rule
  • Direct and indirect ownership analysis
  • Administrative subpoenas and investigations
  • Pre-Penalty Notices
  • Civil enforcement proceedings
  • Potential federal criminal investigations
  • Voluntary self-disclosures
  • Sanctions compliance programs
  • Foreign and Russian clients affected by U.S. restrictions

Before submitting information to a bank or government agency, it is important to determine why the transaction was restricted, which sanctions program applies and whether the matter involves a true SDN match, ownership by blocked persons, a prohibited transaction or an internal risk decision by the financial institution.

Who This OFAC Attorney Represents

Arkady Bukh Law Firm advises and represents:

  • Individuals with blocked personal or business accounts
  • Foreign nationals affected by U.S. sanctions
  • Russian individuals and companies
  • S. citizens and permanent residents
  • International businesses
  • Importers and exporters
  • Financial institutions and payment businesses
  • Cryptocurrency companies
  • Corporate executives
  • Investors
  • Beneficial owners
  • Technology companies
  • Logistics and shipping businesses
  • Professional-service providers
  • Companies responding to OFAC inquiries
  • Persons or entities designated on the SDN List
  • Third parties claiming an ownership interest in blocked property
  • Clients facing civil or criminal sanctions investigations

A person’s nationality alone does not determine whether the person is blocked.

A Russian citizen, foreign company or business operating in a high-risk jurisdiction may still conduct many lawful transactions. The analysis should focus on the relevant sanctions program, list status, ownership, counterparties, services, location of property and connection with the United States.

Blocked Accounts and Payments

OFAC blocking generally means that property is frozen.

When property or an interest in property of a blocked person enters the United States or comes within the possession or control of a U.S. person, applicable regulations may require the property to be blocked.

Blocked property may include:

  • Bank accounts
  • Incoming or outgoing payments
  • Securities
  • Contract rights
  • Debts
  • Real estate
  • Business interests
  • Digital assets
  • Cryptocurrency
  • Goods
  • Payments in transit
  • Other tangible or intangible property

Blocked property is generally not transferred to the government merely because it has been frozen. Ownership may remain with the original owner, but the property ordinarily cannot be transferred, withdrawn, released, sold or otherwise dealt in without authorization.

A bank may block an account or payment because of:

  • An exact SDN match
  • A possible name match
  • Ownership by one or more blocked persons
  • A sanctioned bank or counterparty
  • A prohibited payment route
  • A restricted jurisdiction
  • Information contained in the payment message
  • A law-enforcement request
  • A possible interest of a blocked person in the property
  • An internal sanctions-compliance alert

The first step is to obtain and review the financial institution’s notice or explanation.

The legal response may differ depending on whether the restriction was imposed because of OFAC regulations, a private bank policy, a judicial seizure order or another government action.

Blocked Transactions and Rejected Transactions

Blocking and rejecting a transaction are not the same.

Blocked Transaction

When a transaction involves property that must be blocked, the financial institution generally freezes the property in a blocked account.

The funds remain restricted until:

  • OFAC issues a specific license
  • A general license authorizes the transaction
  • OFAC removes the relevant person from the sanctions list
  • The blocking institution determines that the property was blocked because of mistaken identity or a comparable error and follows the applicable unblocking procedure
  • Another valid authorization permits release

Rejected Transaction

A transaction may be rejected when it is prohibited but does not involve property that must be frozen.

The financial institution refuses to process the transaction rather than placing the money into a blocked account.

Whether a transaction must be blocked or rejected depends on the specific sanctions program and the interests involved.

Blocked and rejected transactions may trigger reporting obligations. A business should not assume that returning a payment or refusing a transfer completes all required compliance steps.

Responding to a Blocked Account

A request to release funds should be supported by evidence addressing the actual reason for the restriction.

Relevant documents may include:

  • Passports and identity records
  • Corporate registration documents
  • Beneficial-ownership charts
  • Contracts
  • Invoices
  • Bank statements
  • Source-of-funds records
  • Payment messages
  • Evidence identifying the ultimate beneficiary
  • Records showing the purpose of the transaction
  • Information distinguishing the client from a listed person
  • Evidence that a general license applies
  • Records establishing third-party ownership

The appropriate strategy may involve:

  • Communicating with the blocking financial institution
  • Correcting incomplete or inaccurate information
  • Demonstrating that a name match is false
  • Analyzing the 50 Percent Rule
  • Requesting reconsideration by the bank
  • Applying for an OFAC specific license
  • Requesting a compliance release when the original blocking resulted from mistaken identity or a similar error
  • Asserting the rights of a non-sanctioned third-party owner
  • Responding to a government seizure or forfeiture action

A client should not attempt to transfer, disguise or remove blocked property without determining whether OFAC authorization is required.

For matters focused specifically on frozen funds, visit the OFAC Unblocking Applications Attorney page.

False-Positive OFAC Matches

A bank or screening system may identify a customer whose name resembles an entry on an OFAC list.

A potential match should be evaluated using additional identifiers, which may include:

  • Full legal name
  • Alternate spellings
  • Transliteration
  • Date of birth
  • Place of birth
  • Nationality
  • Passport information
  • Address
  • Corporate registration number
  • Ownership information
  • Employment
  • Known aliases
  • Other identifying details contained in the OFAC entry

A similar name does not automatically establish that the customer is the listed person.

When a financial institution determines that it blocked property because of mistaken identity, a typographical issue or a similar error, the institution may be able to release the property under the applicable reporting procedures.

The customer usually needs to work directly with the institution that imposed the block and provide reliable identifying evidence.

This process is different from delisting. Delisting is intended for a person or property that is actually included on an OFAC sanctions list. A false-positive matter concerns someone who was mistaken for the listed person.

The OFAC 50 Percent Rule

A company does not need to appear by name on the SDN List to be treated as blocked.

Under OFAC’s 50 Percent Rule, an entity is generally considered blocked when one or more blocked persons directly or indirectly own 50 percent or more of the entity in the aggregate.

Examples may include:

  • One SDN owns 50 percent of a company
  • Two SDNs each own 25 percent
  • A blocked parent company indirectly owns at least 50 percent
  • Several blocked persons hold ownership through intermediate companies

Ownership interests of different blocked persons may be aggregated even when they were designated under different sanctions programs.

The rule applies to direct and indirect ownership.

An ownership review may need to examine:

  • Direct shareholders
  • Parent companies
  • Subsidiaries
  • Holding companies
  • Trusts
  • Beneficial owners
  • Nominee arrangements
  • Aggregated interests
  • Changes in ownership
  • Transfers after designation
  • The authenticity of a claimed divestment

Ownership Compared With Control

The 50 Percent Rule is an ownership rule.

An entity that is controlled by a blocked person but is less than 50 percent owned by blocked persons is not automatically blocked solely under the 50 Percent Rule.

However, control remains relevant.

OFAC may separately designate the entity, and transactions directly involving the blocked person may remain prohibited. For example, a U.S. person generally may not enter into a transaction in which an SDN personally acts on behalf of a non-blocked company.

Businesses should therefore review both ownership and the role played by sanctioned individuals.

Property Blocked Because of Ownership

Property that was correctly blocked while an entity was at least 50 percent owned by blocked persons may remain blocked even if the ownership structure later changes.

A later private transfer or reduction of the blocked ownership interest does not necessarily release property that was already frozen.

Authorization from OFAC may be required unless the relevant person is removed from the applicable list or another OFAC authorization permits release.

A purported sale or divestment should also be reviewed to determine whether:

  • It occurred outside U.S. jurisdiction
  • It involved a U.S. person
  • It was completed before or after blocking
  • Consideration was actually paid
  • Control and economic benefits changed
  • The transaction was genuine rather than nominal
  • Other blocked persons continue to own an interest

SDN List Designations

The Specially Designated Nationals and Blocked Persons List contains individuals, entities and property designated under various sanctions authorities.

The consequences of designation may include:

  • Blocking property within U.S. jurisdiction
  • Prohibition of transactions by U.S. persons
  • Restricted access to U.S. banks
  • Account closures or freezes by foreign institutions
  • Contract termination
  • Exchange-account restrictions
  • Restrictions involving goods or services
  • Business disruption
  • Reputational harm
  • Increased scrutiny of related companies

An OFAC entry may include:

  • The listed name
  • Aliases
  • Date and place of birth
  • Nationality
  • Passport information
  • Addresses
  • Corporate registration information
  • Associated entities
  • Program tags
  • Identification numbers

A designation should be reviewed by identifying every legal authority and designation criterion associated with the listing.

The person may be listed under more than one executive order, statute or sanctions program. Removing one basis may not be sufficient when other designation authorities remain.

Requests for Removal From the SDN List

A person, entity or listed property may request administrative reconsideration of an OFAC designation.

The process is commonly referred to as:

  • A delisting petition
  • A reconsideration request
  • A petition for administrative reconsideration

OFAC currently provides a Reconsideration Portal through which a listed person or authorized representative may submit the request.

A petition may argue that:

  • The designation resulted from mistaken identity
  • The evidence was insufficient
  • The circumstances that supported designation have changed
  • The conduct leading to designation has ended
  • The petitioner no longer meets the designation criteria
  • Ownership or management has changed
  • Relevant relationships have ended
  • Corrective and compliance measures have been implemented

OFAC describes two general grounds for removal:

  • The circumstances resulting in the sanction no longer apply
  • An insufficient basis exists for the sanction

The petition should address every sanctions authority and designation criterion applicable to the listing.

Supporting documents may include:

  • Identity records
  • Corporate records
  • Ownership charts
  • Employment information
  • Financial records
  • Sources of income
  • Details of past and current owners or managers
  • Information concerning relationships with other listed persons
  • Evidence of changed circumstances
  • Compliance policies
  • Documents addressing specific allegations

A petitioner may also request certain unclassified, non-privileged information underlying the sanctions determination through the Reconsideration Portal.

Submitting a petition does not automatically suspend the designation or release blocked assets. Restrictions normally remain in effect unless OFAC grants authorization or removes the listing.

For broader sanctions representation, visit the U.S. Sanctions and OFAC Compliance Attorney page.

OFAC Administrative Investigations

OFAC may investigate possible violations and require individuals or companies to furnish information.

An investigation may begin after:

  • A blocked or rejected payment
  • A bank report
  • A voluntary self-disclosure
  • A whistleblower report
  • A referral from another government agency
  • Review of customs, shipping or export information
  • Identification of an undisclosed beneficial owner
  • A transaction involving an SDN
  • A compliance-system failure
  • A law-enforcement investigation
  • Review of cryptocurrency transactions

OFAC may request or subpoena:

  • Bank records
  • Payment messages
  • Contracts
  • Invoices
  • Corporate documents
  • Ownership information
  • Emails and text messages
  • Internal compliance records
  • Screening results
  • Shipping documents
  • Customer files
  • Electronic records
  • Metadata
  • Digital-asset records
  • Communications with foreign affiliates

OFAC’s authority may include conducting investigations, examining witnesses, receiving evidence and requiring the production of hard-copy and electronic documents.

A subpoena or request for information should not be ignored.

Before responding, counsel may need to determine:

  • Which transactions are under review
  • Which legal entities are covered
  • The relevant time period
  • Whether the client is also involved in a criminal investigation
  • Whether employees need separate representation
  • Whether privileged materials are included
  • Whether foreign privacy laws affect production
  • Whether the deadline is reasonable
  • Whether the scope can be clarified
  • Whether the requested data can be produced in the required format

Responses should be complete, accurate and consistent with the original records.

Pre-Enforcement OFAC Representation

Legal representation may begin before OFAC issues a formal allegation or penalty notice.

Counsel may:

  • Identify the relevant sanctions program
  • Reconstruct the transaction history
  • Review ownership information
  • Analyze applicable licenses and exemptions
  • Examine the client’s sanctions-screening process
  • Respond to an administrative subpoena
  • Review communications with banks
  • Conduct an internal investigation
  • Interview relevant employees
  • Preserve favorable evidence
  • Coordinate with foreign counsel
  • Retain financial or technical experts
  • Analyze possible civil and criminal exposure
  • Prepare a voluntary self-disclosure when appropriate
  • Present factual and legal information to OFAC
  • Address blocked property
  • Prepare for a possible referral to the Department of Justice

Early analysis can help distinguish an authorized transaction, a false-positive match, an ownership issue, a recordkeeping problem and a potentially prohibited transaction.

Voluntary Self-Disclosure

A person or company that discovers a possible violation may consider submitting a voluntary self-disclosure to OFAC.

A qualifying disclosure can be treated as a mitigating factor in civil enforcement and may reduce the applicable base penalty.

The decision should follow a complete legal and factual review.

Important questions may include:

  • Has OFAC already learned of the apparent violation?
  • Was the disclosure submitted before imminent discovery?
  • Is the initial submission complete?
  • Will a detailed report follow?
  • Are related transactions continuing?
  • Have relevant records been preserved?
  • Have responsible employees been identified?
  • Were corrective measures adopted?
  • Are other regulators or prosecutors involved?
  • Could statements in the disclosure affect a criminal matter?

A voluntary disclosure does not provide automatic immunity or guarantee that no enforcement action will occur.

An incomplete or inaccurate submission can create additional problems. The transaction history and applicable regulations should be understood before the conduct is described to the government.

OFAC Civil Enforcement Proceedings

OFAC may resolve an apparent violation through several possible administrative responses.

Depending on the circumstances, the response may include:

  • No further action
  • A cautionary letter
  • A Finding of Violation
  • A civil monetary penalty
  • A settlement agreement
  • Additional compliance obligations
  • Referral to another government agency

When OFAC believes a civil monetary penalty may be appropriate, it may issue a Pre-Penalty Notice describing:

  • The alleged violations
  • The regulations or authorities involved
  • The transactions at issue
  • The proposed penalty
  • Relevant enforcement factors
  • The deadline and procedure for responding

The recipient may submit a written response presenting legal arguments, factual corrections and supporting documents.

The response may address:

  • Whether a violation occurred
  • Whether a license or exemption applied
  • The client’s knowledge and conduct
  • Ownership of the relevant entity
  • The number and value of transactions
  • Cooperation with OFAC
  • The effectiveness of the compliance program
  • Corrective action
  • Prior enforcement history
  • Voluntary disclosure
  • The proposed penalty calculation

A Penalty Notice generally represents OFAC’s final agency determination regarding the assessed civil penalty.

OFAC Penalties

There is no single universal penalty for an OFAC violation.

The maximum civil penalty depends on:

  • The statute underlying the sanctions program
  • The number of violations
  • The value of the transactions
  • Annual inflation adjustments
  • Whether OFAC considers the matter egregious
  • Whether the conduct was voluntarily disclosed
  • The client’s awareness of the conduct
  • Harm to the sanctions program
  • Cooperation
  • Compliance history
  • Corrective measures

OFAC adjusts civil monetary penalty amounts periodically as required by federal law.

For this reason, a sanctions page should not use a single fixed dollar figure as the maximum penalty for every case.

OFAC’s enforcement response may be influenced by:

  • Willfulness or recklessness
  • Management involvement
  • Awareness of the conduct
  • Economic benefit
  • Harm to sanctions objectives
  • The client’s commercial sophistication
  • Compliance controls
  • Remedial response
  • Cooperation with investigators
  • Prior violations
  • Timing in relation to a new sanctions restriction

Failure to comply with a valid requirement to furnish information can itself create separate civil exposure, even when no underlying sanctions violation has yet been established.

Civil Liability and Strict Liability

OFAC may impose civil liability under sanctions programs that apply on a strict-liability basis.

This means that a person subject to U.S. jurisdiction may face civil enforcement even when the person claims not to have known that the transaction was prohibited.

Lack of knowledge may still be relevant to:

  • The enforcement response
  • Whether the conduct was egregious
  • The penalty amount
  • The assessment of compliance procedures
  • Mitigation
  • A possible criminal referral

Civil strict liability should not be confused with criminal guilt.

Federal criminal prosecution requires the government to prove the elements and mental state specified by the charged criminal statute.

Federal Criminal Sanctions Investigations

A sanctions matter may be referred to the Department of Justice when authorities suspect willful violations, evasion, concealment or related criminal activity.

Allegations may involve:

  • Knowingly processing prohibited payments
  • Causing a U.S. bank to conduct a restricted transaction
  • Concealing a sanctioned participant
  • Removing identifying information from payment messages
  • Using shell companies or nominee owners
  • Routing transactions through third countries
  • Providing prohibited goods or services
  • Transferring property for an SDN
  • Evading licensing requirements
  • Making false statements
  • Laundering funds
  • Obstructing an investigation
  • Conspiring with other participants

A criminal investigation may include:

  • Grand jury subpoenas
  • Target letters
  • Witness interviews
  • Search warrants
  • Seizure of computers and phones
  • Bank and payment records
  • International evidence
  • Arrest warrants
  • Asset forfeiture
  • Extradition

The possible sentence depends on the statutes charged and the circumstances of the case.

A blanket statement that every sanctions violation carries a fixed 20-year sentence would be inaccurate. Some willful violations prosecuted under the International Emergency Economic Powers Act can carry substantial criminal penalties, but related charges such as money laundering, conspiracy, false statements and obstruction have their own elements and sanctions.

Possible OFAC Defense Issues

The available defense depends on the sanctions program, transaction and enforcement theory.

A General License Applied

The transaction may have satisfied all conditions of an applicable general license.

The analysis should review:

  • Covered persons
  • Authorized activities
  • Effective dates
  • Reporting requirements
  • Recordkeeping requirements
  • Excluded transactions
  • Other restrictions that remained applicable

A Specific License Authorized the Conduct

The client may have acted within the scope of a written OFAC authorization.

The transaction should be compared with the persons, activities, amounts, dates and conditions stated in the license.

No Blocked Person Had an Interest

The customer or beneficiary may have been confused with another person.

A company may not have been at least 50 percent owned by blocked persons.

The Ownership Calculation Was Incorrect

The bank or government may have:

  • Misidentified a shareholder
  • Counted a non-blocked owner as blocked
  • Misunderstood indirect ownership
  • Relied on outdated records
  • Treated control as ownership
  • Failed to recognize a genuine pre-blocking divestment

The Transaction Should Have Been Rejected Rather Than Blocked

A financial institution may have frozen property when the applicable restriction required only that the transaction not be processed.

The Client Did Not Act Willfully

In a criminal case, the government may be unable to establish the required knowledge and intent.

The client may have relied on incorrect information supplied by a bank, customer, intermediary or compliance provider.

The Client Did Not Cause a U.S. Transaction

A foreign person may dispute whether their conduct caused a U.S. person or financial institution to participate in a prohibited transaction.

No Agreement to Evade Sanctions Existed

Commercial communications, use of an intermediary or a complex corporate structure do not automatically prove a criminal conspiracy.

Information Was Not Concealed

A shortened payment message, automated field or data-format limitation may be different from an intentional attempt to remove a sanctioned party’s identity.

The Evidence Is Incomplete or Unreliable

The government may rely on:

  • Incomplete payment records
  • Interested witnesses
  • Incorrect translations
  • Outdated corporate documents
  • Unsupported assumptions about beneficial ownership
  • Misinterpreted emails
  • Incorrect cryptocurrency attribution

The Penalty Calculation Is Incorrect

OFAC may have included:

  • Duplicate transactions
  • Authorized transactions
  • Activity by another legal entity
  • Transactions outside the relevant period
  • Amounts unrelated to the apparent violation
  • Property that the client did not control

Sanctions Compliance and Screening

A sanctions compliance program should be based on the company’s actual risks.

Relevant factors may include:

  • Customer location
  • Counterparty location
  • Products and services
  • Payment routes
  • Correspondent banks
  • Beneficial ownership
  • Corporate affiliates
  • Shipping routes
  • Digital assets
  • Agents and intermediaries
  • Countries of operation

Controls may include:

  • Customer identification
  • Sanctions-list screening
  • Alternate-name and transliteration screening
  • Beneficial-ownership review
  • Payment screening
  • Escalation procedures
  • Transaction holds
  • License review
  • Reporting
  • Record retention
  • Employee training
  • Independent testing

A screening alert should not be treated as a confirmed sanctions violation without further analysis.

The company may need to distinguish:

  • A true SDN match
  • A false positive
  • A company blocked under the 50 Percent Rule
  • A non-blocked company controlled by an SDN
  • A party subject to non-blocking restrictions
  • An authorized transaction
  • A transaction requiring a specific license
  • A transaction that must be rejected rather than blocked

Foreign Persons and U.S. Sanctions

A foreign person or company may become involved in an OFAC matter when a transaction has a U.S. connection.

Possible connections include:

  • A payment in U.S. dollars
  • A U.S. correspondent bank
  • A U.S. company
  • A U.S. citizen or permanent resident
  • A U.S. branch or subsidiary
  • S.-origin goods or technology
  • A U.S. online platform
  • A U.S. cryptocurrency exchange
  • Property located in the United States
  • Conduct intended to cause a U.S. person to violate sanctions

Foreign persons may also face risk when authorities allege that they caused, assisted or conspired to cause prohibited conduct or attempted to evade U.S. restrictions.

The analysis should consider:

  • Jurisdiction
  • Transaction route
  • Ownership
  • Services provided
  • Location of assets
  • Use of U.S. infrastructure
  • Knowledge of the U.S. connection
  • Parallel foreign sanctions
  • Criminal investigation and travel risk

Russia-Related OFAC Matters

Russia-related sanctions may affect:

  • Individuals and companies on the SDN List
  • Entities owned by blocked Russian persons
  • Transactions involving restricted banks
  • Securities and debt
  • Energy-related activity
  • Professional services
  • Imports and exports
  • Investment activity
  • Shipping
  • Cryptocurrency
  • Payments through U.S. banks
  • Legal fees
  • Personal remittances
  • Blocked property

Russian citizenship alone does not prohibit every U.S.-connected transaction.

The review should identify:

  • Every participant
  • Ownership and control
  • The bank and payment route
  • The applicable executive order or regulation
  • The date of the transaction
  • The goods or services involved
  • Available general licenses
  • Whether a specific license is required
  • Reporting and recordkeeping obligations

Because sanctions programs change, the analysis should use the rules and authorizations in effect at the time of the transaction.

Cryptocurrency and OFAC Sanctions

OFAC restrictions apply to digital assets as well as traditional forms of property.

A crypto sanctions matter may involve:

  • A wallet associated with an SDN
  • A sanctioned exchange
  • Blockchain exposure to a blocked address
  • A frozen exchange account
  • Cryptocurrency held as blocked property
  • A transaction involving a restricted jurisdiction
  • Ransomware allegations
  • Sanctions evasion
  • A source-of-funds inquiry

A blockchain analytics alert does not conclusively establish that the customer controlled or knowingly transacted with a blocked wallet.

Relevant questions may include:

  • Who controlled the private keys
  • Whether the account was custodial
  • Whether several people had access
  • Whether the wallet label is accurate
  • Whether the transaction was direct or indirect
  • The number of intermediary transfers
  • The commercial purpose of the payment
  • Whether the transaction was automated
  • Whether the customer knew about the alleged sanctions exposure

For broader digital-asset matters, visit the Cryptocurrency and Crypto Law Attorney page.

Bukh Law Firm OFAC Sanctions Services

Blocked-Account Representation

Review of bank notices, sanctions programs, ownership and supporting documents for frozen funds.

Rejected Transfer Analysis

Determining why a payment was rejected and whether reporting or additional action is required.

OFAC License Applications

Preparation of specific license requests and analysis of applicable general licenses.

For focused licensing assistance, visit the OFAC Licenses Attorney page.

SDN Designation and Delisting

Review of designation authorities, preparation of reconsideration petitions and responses to OFAC questionnaires.

OFAC 50 Percent Rule Analysis

Review of direct, indirect and aggregate ownership by blocked persons.

False-Positive Match Resolution

Assistance with mistaken identity, similar names and inaccurate sanctions-screening results.

Administrative Subpoena Response

Collection, review and production of financial, corporate and electronic records requested by OFAC.

Pre-Penalty and Enforcement Defense

Responses to Pre-Penalty Notices, Findings of Violation and proposed civil monetary penalties.

Internal Sanctions Investigations

Review of historical transactions, ownership, payment routing, employee decisions and possible remedial measures.

Voluntary Self-Disclosure

Assessment and preparation of disclosures involving apparent sanctions violations.

Federal Criminal Defense

Representation in investigations involving sanctions evasion, IEEPA, conspiracy, money laundering and false statements.

Sanctions Compliance

Development and review of screening, ownership, escalation, reporting, recordkeeping and training procedures.

International and Russian Sanctions Matters

Advice concerning foreign clients, Russian counterparties, U.S. banks and cross-border transactions.

Cryptocurrency Sanctions Matters

Analysis of wallets, exchange restrictions, blocked digital assets and blockchain evidence.

What to Do After an OFAC Problem Arises

Do not attempt to hide, transfer or withdraw blocked property.

Do not remove a participant’s name from payment instructions to avoid sanctions screening.

Preserve:

  • Bank statements
  • Payment messages
  • Contracts
  • Invoices
  • Corporate ownership records
  • Customer-identification documents
  • Communications with financial institutions
  • Screening results
  • OFAC licenses
  • Shipping records
  • Emails and messages
  • Cryptocurrency records
  • Internal compliance decisions
  • Reports submitted to OFAC

Determine:

  • Who imposed the restriction
  • Whether the transaction was blocked or rejected
  • Which sanctions program applies
  • Whether an actual or potential SDN match exists
  • Whether blocked persons own an interest in a company
  • Whether a general license applies
  • Whether a specific license is required
  • Whether OFAC reporting deadlines apply
  • Whether an administrative investigation has begun
  • Whether a criminal investigation may be underway

Arkady Bukh Law Firm represents individuals and businesses in OFAC blocked-asset matters, SDN designations, sanctions investigations, compliance reviews and enforcement proceedings.

OFAC Sanctions Attorney FAQ

Is Arkady Bukh an OFAC sanctions attorney?

Yes. Arkady Bukh Law Firm represents individuals and businesses in OFAC matters involving blocked assets, sanctions lists, investigations, compliance and enforcement.

What should I do if my bank account is blocked because of OFAC?

Obtain the bank’s notice, preserve the transaction documents and determine whether the restriction resulted from an actual SDN interest, the 50 Percent Rule, a false-positive match or another legal authority.

Does blocked property belong to the U.S. government?

Not necessarily. Blocking generally freezes property and prohibits dealings in it. Ownership may remain with the original owner unless the property is separately forfeited or transferred through another legal process.

What is the difference between a blocked and rejected payment?

A blocked payment is frozen because blocked property is involved. A rejected transaction is not processed but is not placed into a blocked account. The applicable sanctions program determines the correct treatment.

Can OFAC release blocked funds?

OFAC may authorize release through a specific license or another applicable authorization. In false-positive cases, the institution that imposed the block may also have procedures for correcting the error.

What is an OFAC false positive?

It is a sanctions-screening match involving a person who is not actually the listed sanctions target, often because of a similar name or incomplete identification information.

What is the SDN List?

The SDN List identifies individuals, entities and property subject to blocking sanctions under various legal authorities.

Can a person be removed from the SDN List?

A listed person, entity or authorized representative may submit a petition for administrative reconsideration. The petition should address every legal basis for the designation.

Does filing a delisting request release blocked assets?

No. A delisting petition does not automatically suspend sanctions or release property while the petition is being reviewed.

What is the OFAC 50 Percent Rule?

A company is generally considered blocked when one or more blocked persons directly or indirectly own at least 50 percent of it in the aggregate.

Does control by an SDN automatically block a company?

Not solely under the 50 Percent Rule when blocked ownership is below 50 percent. Transactions directly involving the SDN may still be prohibited, and OFAC may separately designate the company.

Can OFAC subpoena documents?

Yes. OFAC may require reports and documents and may issue administrative subpoenas in connection with sanctions investigations.

What happens after an OFAC administrative subpoena?

The recipient may need to preserve and collect financial, corporate and electronic records, evaluate privilege and foreign-law issues and submit an accurate response by the applicable deadline.

Can OFAC impose a penalty without proving that I knew about the sanctions?

Civil enforcement may apply on a strict-liability basis under applicable programs. Knowledge, intent, compliance efforts and cooperation can still affect the enforcement response and penalty.

Can an OFAC matter become a criminal case?

Yes. Allegations of willful violations, evasion, concealment, false statements, money laundering or conspiracy may be referred for federal criminal investigation.

Is every OFAC violation punishable by 20 years in prison?

No. Criminal consequences depend on the specific statutes and charges. A general statement assigning the same prison term to every sanctions violation is inaccurate.

Can a voluntary self-disclosure reduce penalties?

A qualifying voluntary self-disclosure may reduce the civil base penalty and act as a mitigating factor, but it does not provide automatic immunity.

Do U.S. sanctions apply to foreign companies?

They may apply when a transaction involves U.S. persons, banks, property, goods, services or infrastructure, or when authorities allege that a foreign person caused a U.S. sanctions violation.

Is every Russian citizen subject to OFAC sanctions?

No. Nationality alone does not establish sanctions status. The relevant program, list entry, ownership structure and transaction must be examined.

Does a cryptocurrency wallet alert prove an OFAC violation?

No. Blockchain analytics may identify transaction exposure, but wallet ownership, knowledge, custody and the complete transaction path must still be examined.