I often hear from frustrated practitioners, as well as Specially Designated Nationals (SDN), contesting SDN designations by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC), that removals are impossible or that there is no legitimate way to contest the designation. While I can appreciate their frustration with the OFAC SDN removal process, its not impossible to be removed. Moreover, there is a process in place to contest the designation, although it is certainly not a perfect process.

The procedures for contesting an OFAC SDN designation, or asserting a case of mistaken identity, have been found in OFAC’s regulations since 1999. These regulations are codified at 31 CFR 501.806 and 501.807. These procedures allow for the party contesting a blocking or an OFAC SDN designation to submit evidence and reasons why the blocking or designation was made in error or that there has been a change in circumstances sufficient to justify a reconsideration of the original designation or blocking. Typically, these submissions require a large number of supporting documents. The most compelling documents are those which are provided by a foreign government in the country where the SDN contesting their designation resides. In addition, OFAC is much more likely to pay attention to a reconsideration request if a foreign government is communicating with them regarding the reconsideration.

Moreover, the belief that OFAC never removes anyone from the SDN List is incorrect. While the agency is certainly more focused upon designations than reconsideration, OFAC has released at least 100 persons or entities from the SDN List in each of the last three years. While that may not sound like a lot, when one considers the OFAC list is made up of 6,000 persons and entities, then it seems more significant that nearly 5% of all designated parties have been removed from the OFAC SDN List over the last three years. Granted, many of these were removed in response to the dismantling of several Colombian drug cartels, however, it does show that OFAC will remove SDNs from the list if their designation is no longer warranted. Indeed, this year alone, our firm has had two individuals designated as Foreign Narcotics Trafficking Kingpins removed from the SDN List.

Finally, if OFAC’s administrative process does not lead to a rescission of the designation there are other options. For those persons designated as SDNs who are U.S. persons, a civil suit can be filed against OFAC for violations of constitutional rights to due process. For foreign nationals designated as SDNs, the only judicial recourse may be under the Administrative Procedure Act either for review of OFAC’s final decision in the administrative reconsideration process or for undue delay if OFAC is delayed in their rendering of a decision on the reconsideration submission.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.