OFAC Blocked Funds Lawyers — Comprehensive Legal Defense

Yes. OFAC sanctions have extraterritorial reach — they apply not only to US citizens and companies but to any transaction that passes through the US financial system, involves a US counterparty, or is denominated in US dollars. This means that individuals and businesses outside the United States are frequently affected by OFAC blocks and enforcement actions.

Our OFAC attorneys represent clients from across the world, including those whose funds were frozen by a correspondent bank with no direct connection to the US beyond dollar clearing. If your account has been frozen or a wire transfer blocked with a reference to OFAC sanctions, you have the same legal options available to you regardless of your nationality or country of residence.

These are two distinct legal remedies that apply in different situations.

An OFAC license is an authorization granted by OFAC that permits a transaction which would otherwise be prohibited under sanctions regulations. It does not change your status — you or the counterparty may still be subject to sanctions — but it allows a specific action (releasing funds, completing a transaction, accessing a blocked account) to proceed legally. Licenses can be general (published and available to all) or specific (issued to a named applicant for a defined purpose). An OFAC licensing attorney prepares and submits the application and works with OFAC’s licensing division directly.

SDN list removal — also called delisting — is the process of having your name or your company removed from OFAC’s Specially Designated Nationals list entirely. This is a more involved process that requires demonstrating to OFAC that the basis for designation no longer exists, was made in error, or that circumstances have changed sufficiently to warrant removal. Successful SDN list removal lifts all sanctions-related restrictions permanently, rather than authorizing a single transaction.

In simple terms: a license is a workaround for a specific situation; delisting is a permanent resolution to the underlying designation.

When a bank identifies a transaction or account as potentially linked to OFAC sanctions, it is legally required to block the funds immediately and report the action to OFAC within 10 business days. The bank cannot release the funds on its own authority — doing so would expose it to significant penalties.

From that point, you will typically receive a written notice from the bank stating that the funds have been blocked pursuant to OFAC regulations. The notice may be brief and contain little explanation of the specific reason for the block.

The steps that follow depend on why the block occurred. If it is a false positive — which is common, particularly for individuals with names similar to those on the SDN list — the resolution process involves providing the bank and OFAC with documentation establishing your identity and the legitimate nature of the transaction. If the block relates to an actual sanctions issue involving a counterparty or jurisdiction, an unblocking petition or specific license application will be required.

What you should not do: do not attempt to restructure the transaction, move funds through alternative channels, or pressure the bank to release the money without legal clearance. Any of these actions can trigger an OFAC investigation independent of the original block. Contact an OFAC attorney before taking any steps.

The timeline depends on the reason for the block and the method required to resolve it.

False positive — 1 to 4 weeks. The most common scenario: your name, your counterparty’s name, or a transaction detail triggered an automated sanctions screening system, but neither party is actually on the SDN list. Once your attorney submits the appropriate documentation to the bank — establishing your identity and the legitimate nature of the transaction — most banks resolve false positives within one to four weeks. Some cases close faster if the bank’s compliance team is responsive.

Unblocking petition — 4 to 12 weeks. If the funds were blocked because a party to the transaction has a genuine connection to OFAC sanctions, a formal unblocking petition must be submitted directly to OFAC. OFAC does not publish fixed processing times for petitions, but in practice most straightforward cases receive a response within 60 to 90 days. Cases involving larger sums, multiple parties, or complex ownership structures take longer.

Specific license application — 30 to 90 days, sometimes more. Where the transaction requires OFAC authorization rather than just documentation, your attorney files a specific license application with OFAC’s licensing division. OFAC’s published average processing time is approximately 90 days, though routine applications are sometimes resolved faster. Time-sensitive situations — such as medical payments, inheritance distributions, or imminent business losses — may qualify for expedited review, which your attorney can formally request.

SDN removal — 6 months to several years. If the underlying issue is that you or a counterparty is designated on the SDN list, full resolution requires a delisting petition. This is the most involved process and the longest — OFAC reviews the complete factual and legal basis for the designation, which can take anywhere from six months to several years depending on the complexity of the case and the sanctions program involved.

The single most important factor in reducing the timeline is acting immediately after the block occurs. Delays in gathering documentation, responding to bank inquiries, or identifying the correct legal remedy add weeks or months to every category above. Contact an OFAC attorney as soon as you receive notice that funds have been blocked.