OFAC Attorney New York | SDN Delisting & Asset Unblocking
A New York-based tech founder discovered his company’s wire transfer was blocked in February 2026—OFAC had designated a business partner with a similar name on the SDN List, freezing $2.1 million in operating capital. His legal team had 10 days to file a blocking report with FinCEN and initiate delisting procedures before the company’s payroll obligations triggered defaults.
If This Sounds Like Your Situation
- A wire transfer got rejected or a bank account froze without explanation. We identify whether it’s a genuine SDN match, a false positive, or a 50 Percent Rule exposure — and file the required blocking report before the 10-day FinCEN deadline passes.
- Your name, or your business partner’s, showed up on the SDN List. We prepare mistaken-identity or changed-circumstances delisting petitions and manage the case through OFAC’s Office of Compliance and Enforcement.
- You need funds released for payroll, rent, or a closing — now, not in six months. We file Specific License applications for defined transactions while a longer-term delisting petition proceeds separately.
- OFAC denied your petition or license, or has gone silent for months. We litigate under the Administrative Procedure Act in the Southern District of New York.
What OFAC Designation Means: Immediate Freezes, Transaction Blocks, and Criminal Exposure
OFAC maintains the SDN List under Executive Order 13224 (terrorism), Executive Order 14024 (Russia), and other sanctions programs targeting narcotics trafficking, cybercrime, weapons proliferation, and human rights abuses. As of January 2026, the SDN List contained 12,847 individuals and entities. Any U.S. person or entity conducting transactions with listed parties faces strict liability civil penalties, regardless of intent or knowledge.
Designation triggers immediate consequences. All property and interests in property subject to U.S. jurisdiction are blocked. Financial institutions freeze accounts within hours of OFAC publication; wire transfers are rejected and credit facilities terminate. The blocking occurs before the designated party receives notice — most clients learn of designation through rejected transactions, closed bank accounts, or vendor notifications, not direct OFAC contact.
Criminal prosecution risk is substantial. Under 50 U.S.C. § 1705(c), willful violations carry penalties up to $1 million per transaction and 20 years imprisonment. The Department of Justice prosecuted 47 sanctions violations in 2025, with an 89% conviction rate in cases that reached trial. United States v. Robert Wise (SDNY, 2024) — a New York attorney pled guilty to conspiring to commit international money laundering by making $3.8 million in payments to maintain properties owned by a sanctioned Russian oligarch, resulting in a 30-month prison sentence.
Civil exposure extends beyond designated parties. OFAC assessed $847 million in civil penalties in 2025 across 34 enforcement actions. The largest New York penalty — $7,139,305 against Gracetown, Inc., a property management firm — involved sanctions violations for managing assets owned by designated Russian nationals between 2018 and 2022. Settlement required disgorgement of management fees, a comprehensive compliance program, and five years of OFAC monitoring.
OFAC Attorney New York | SDN Delisting & Asset Unblocking
Our team specialises in cases with an international element. We review applicable treaties, assess risks, and prepare an action plan.
Contact a lawyer →How OFAC Designations Occur: The Intelligence Process and Common Designation Triggers
OFAC designations originate from Treasury Department intelligence, FBI reports, CIA assessments, interagency referrals, and foreign government notifications. The agency doesn’t verify every factual allegation before listing — designations rest on classified intelligence the designated party cannot review or challenge directly. This opacity creates frequent mistaken-identity cases, especially for common names from high-risk jurisdictions.
Common designation triggers include:
- The 50 Percent Rule (31 C.F.R. § 501.301) — any entity owned 50% or more, in the aggregate, by one or more blocked persons is itself blocked, even without a separate SDN listing. Ownership can be indirect and layered through intermediate entities.
- Wire transfers or financial relationships with SDN-listed persons.
- Family relationships to designated individuals, particularly under counter-narcotics and terrorism programs.
- Geographic presence or business operations in embargoed countries.
- Association with sectors under sectoral sanctions — Russian energy, defense, and financial sectors under Executive Order 14024.
A 2025 Treasury Inspector General report documented 1,247 mistaken-identity blocking incidents in 2024, with average resolution time exceeding 180 days when designated parties lacked legal representation.
The designation standard is “reasonable cause to believe,” not proof beyond reasonable doubt. OFAC need not prove the designated party committed violations — evidence of association, facilitation, or material support suffices. Courts have interpreted “acting for or on behalf of” sanctioned persons to include indirect relationships and unintentional facilitation.
Why New York-Based OFAC Attorneys Have Jurisdictional Advantages
New York hosts the Federal Reserve Bank of New York, which administers OFAC licensing for financial institutions; the Southern District of New York, where 68% of OFAC-related federal litigation is filed; and the Second Circuit Court of Appeals, which established key precedents limiting OFAC’s designation authority in Holy Land Foundation v. Ashcroft (2003) and KindHearts for Charitable Humanitarian Development v. Geithner (2011).
| Jurisdiction Factor | New York Advantage | Why It Matters |
|---|---|---|
| Federal Court Venue | SDNY handles 68% of OFAC litigation | Local counsel know judicial patterns, clerks’ procedures, and settlement ranges |
| Financial Center | 87 foreign bank branches, 203 U.S. banks | Direct relationships with compliance officers who execute OFAC blocking orders |
| Treasury Proximity | Federal Reserve Bank of New York | Face-to-face meetings with OFAC Licensing Division officers (Washington, D.C. meetings via Amtrak same-day) |
| Second Circuit Precedent | Pro-due-process rulings in sanctions cases | Stronger legal grounds for APA challenges to arbitrary designations |
Major New York firms with dedicated OFAC practices include White & Case LLP, Kirkland & Ellis LLP, and Dentons New York. These firms combine transactional experience (structuring compliant deals with sanctioned-country exposure) with litigation capability (federal court challenges to Treasury determinations). Local counsel understand how New York banking institutions respond to blocking orders—knowledge critical when negotiating asset unblocking under Specific License authority.
The New York-Specific Layer: State Banking Compliance
Federal OFAC obligations are the same everywhere. What’s different in New York is Article 2-B of the New York Banking Law, which requires state-chartered banks to run OFAC screening programs and report blocking actions to the Department of Financial Services within 30 days — a separate state filing on top of the federal blocking report. The DFS Cybersecurity Regulation (23 NYCRR 500) folds sanctions screening into mandatory cybersecurity compliance, with annual certification to the superintendent. If your funds are frozen at a New York-chartered institution, this second regulatory layer shapes both the deadline you’re working against and the leverage available in negotiations.
The Legal Roadmap: Delisting Petitions, License Applications, and Federal Court Challenges
Three legal routes exist to challenge an OFAC designation or unblock frozen assets: administrative delisting petitions, license applications, and judicial review under the Administrative Procedure Act.
Delisting petitions are submitted to OFAC’s Office of Compliance and Enforcement. The petition must demonstrate either mistaken identity or changed circumstances (the conduct that triggered designation has ceased and will not recur).
- Mistaken identity petitions require certified passport copies, biometric verification, and documentation of business activities inconsistent with OFAC’s designation rationale — including review of transliteration variations (“Mohamed” vs. “Mohammed,” Cyrillic-to-Latin conversion errors).
- Changed circumstances petitions require evidence the designated party severed all relationships with sanctioned entities, divested ownership stakes, and implemented compliance programs preventing future violations. OFAC applies a “reasonable assurance” standard.
Simple mistaken-identity cases with clear documentation resolve in 30–60 days. Complex changed-circumstances petitions involving Russian oligarchs, Venezuelan officials, or terrorism designations take 6–12 months. OFAC doesn’t publish response deadlines — petitions remain pending indefinitely unless counsel maintains regular contact with the assigned case officer.
General Licenses authorize specific transaction categories without requiring an application — for example, General License 8D under the Russian Harmful Foreign Activities Sanctions program permits certain legal services. Specific Licenses require individual applications for everything else: unfreezing accounts for living expenses, releasing funds for medical treatment, authorizing real estate transactions involving blocked property.
A Specific License application needs four things: a detailed narrative of the intended transaction, a legal memorandum showing OFAC’s published licensing policy supports the request, financial proof the transaction serves humanitarian goals or U.S. policy interests, and certification that no funds flow to designated parties. Skip the legal memorandum, and OFAC denies the application automatically — no reconsideration.
OFAC’s 2025 Annual Report shows the agency approved 2,847 Specific License applications and rejected 423 — a 13% denial rate. Humanitarian cases average 45 days; commercial licenses run 90 days; anything touching Russian or Iranian designated parties stretches past 180 days.
The Administrative Procedure Act (5 U.S.C. § 706) allows designated parties to sue OFAC in federal court if the agency acted arbitrarily, capriciously, or outside its legal authority. SDNY generally requires exhaustion first — file a delisting petition, get OFAC’s response, then sue — except for due process violations demanding immediate injunctive relief.
To win, a plaintiff must show one of four things: OFAC relied on insufficient evidence; the agency ignored its own procedures; the designation violated due process by withholding the evidentiary record; or OFAC misread its statutory mandate. Courts apply “arbitrary and capricious” review from Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) — judges defer to OFAC’s findings unless the administrative record has no rational basis.
Al Haramain Islamic Foundation v. U.S. Department of Treasury, 686 F.3d 965 (9th Cir. 2012), forced OFAC to disclose unclassified evidence summaries so meaningful judicial review became possible. The Second Circuit hasn’t formally adopted this standard, though unpublished decisions on New York-based entities cite Al Haramain with approval.
SDNY litigation takes 18 to 24 months from complaint to summary judgment. Discovery stays confined to OFAC’s administrative record, though procedural due process claims allow supplemental briefing. Most cases settle before judgment — Treasury counsel can offer Specific Licenses or expedited delisting review as alternatives to losing in court.
Step-by-Step OFAC Defense Process: What Your Attorney Does from Day One
Weeks 1-2: Emergency Response and Blocking Compliance
Verify the designation is real — search OFAC’s SDN List and pull the Federal Register notice explaining the listing. Identify every blocked account, frozen asset, and rejected transaction. Financial institutions must file blocking reports within 10 business days under 31 C.F.R. § 1020.210 — missing this deadline creates a separate violation on top of the designation itself. Notify all banks, creditors, and business counterparties of the listing. Using blocked funds for any purpose, including rent or utilities, is itself a violation.
Weeks 3-6: Petition Preparation and Evidence Compilation
Document identity, business relationships, and professional activities that explain why OFAC listed the client. Gather certified identity documents, financial records, corporate formation papers, and witness statements. Compare OFAC’s public designation rationale against the facts to spot gaps or procedural errors. Draft the delisting petition or Specific License application with a supporting legal memorandum, and identify the assigned case officer. If humanitarian hardship or business catastrophe exists, request expedited review.
Months 2-6: Administrative Review and Agency Negotiation
If 14 days pass without a substantive OFAC response, follow up. New evidence can be submitted on a rolling basis before final denial. While the delisting petition sits, negotiate interim Specific Licenses to unfreeze assets for immediate needs. If OFAC denies the petition, demand the detailed reasoning and evidentiary basis, then evaluate whether administrative appeal or federal court suit makes sense.
Months 6+: Federal Court Challenge (if administrative routes fail)
File an APA complaint in SDNY. Request a preliminary injunction if asset unblocking prevents irreparable harm. Dissect OFAC’s administrative record to expose arbitrary or capricious reasoning, and negotiate with Treasury counsel — most cases settle before summary judgment through Specific License grants or expedited delisting. If settlement stalls, litigate summary judgment and prepare for oral argument, appealing to the Second Circuit if necessary.
How to Choose an OFAC Attorney: What to Look For in New York Counsel
Demand demonstrated experience in Treasury enforcement — voluntary disclosures that cut penalties, successful delisting petitions with documented results, federal court wins against OFAC. Verify counsel understands OFAC’s evidentiary process: how to extract unclassified summaries of the intelligence behind a designation, and how to challenge it under Al Haramain due process standards.
| Qualification | Why It Matters | How to Verify |
|---|---|---|
| Treasury Enforcement Experience | Predicts how OFAC officers decide cases and which licensing precedents influence outcomes | Ask the specific number of voluntary disclosures filed and penalties successfully negotiated |
| SDNY Litigation Experience | Navigates federal court rules, knows judges’ track records on sanctions disputes, understands settlement ranges | Search PACER for the attorney’s name in OFAC-related federal cases |
| Banking Relationships | Reaches compliance officers directly to accelerate unblocking once OFAC grants licenses | Request references from financial institutions where the attorney resolved blocking orders |
| Language Capability | Translation errors in Russian, Arabic, Farsi documents cost cases—OFAC denies applications over mistranslations | Confirm in-house translation resources and prior cases in the relevant language |
Prior Treasury or DOJ employment helps but isn’t necessary — track record is what counts. Avoid anyone promising guaranteed delisting or claiming special insider relationships with OFAC officers; Treasury ethics rules prohibit ex parte communications about pending matters.
Our Leading Attorneys
Dmytro Konovalenko, is a lawyer with many years of experience in dealing with the Interpol File Control Commission. Dmytro has successfully appealed for a red notice from countries of Europe, Asia, the Far East.
Anatoliy Yarovyi, lawyer, Doctor of Laws. Anatoliy specializes in appeals against INTERPOL Red Notices of North America, Latin America, Europe and Africa.
Key Deadlines, Statutory References, and Compliance Requirements You Must Know
Financial institutions file blocking reports within 10 business days under 31 U.S.C. § 5311 — missing this deadline is itself a violation. Designated parties must keep records of all blocking incidents for five years under 31 C.F.R. § 501.601.
Criminal referral to DOJ typically follows when violations exceed $500,000 in aggregate, involve deliberate evasion schemes, or touch terrorism or narcotics. DOJ’s 2025 enforcement statistics show 89% of criminal referrals came from voluntary self-disclosures rather than OFAC investigations — early disclosure with counsel cuts prosecution risk.
Civil OFAC penalties carry a five-year statute of limitations under 31 U.S.C. § 5321(b)(1); criminal violations carry the same window under 18 U.S.C. § 3282, though conspiracy and continuing violations toll the clock differently. The limitation period starts from the date of the violative transaction, not when OFAC discovers it — a violation from 2019 discovered in 2024 may still be within reach, one from 2018 likely isn’t.
OFAC Enforcement Trends in New York: 2025-2026 Statistics and Case Patterns
In 2025, OFAC assessed $847 million across 34 enforcement actions; New York entities absorbed $183 million of that, nearly 22%. The largest single action involved a financial services firm that settled for $68 million over inadequate screening of wire transfers between 2019 and 2023, which allowed 2,847 transactions with Russian and Iranian designees to pass through.
Three patterns dominate New York violations: screening systems that miss designated names (42% of cases), compliance teams that fail to escalate blocked transactions (28%), and front-line staff with spotty sanctions training (19%). OFAC’s 2025 Enforcement Guidelines classify these as “egregious” absent self-disclosure and remediation.
Of 89 voluntary self-disclosures filed in 2025, 67 avoided enforcement or cut penalties by 40% or more. OFAC’s Economic Sanctions Enforcement Guidelines (updated November 2024) offer a baseline 50% penalty reduction for voluntary disclosure, with additional mitigation for demonstrated remediation and cooperation.
Enforcement focus areas going forward: cryptocurrency addresses linked to sanctioned parties (47 designated in 2025 alone), shell companies and nominee arrangements masking beneficial ownership (27 actions in 2025 turned on complex structures), and correspondent banking relationships where KYC procedures failed to surface sanctions exposure.
FAQ
When should you contact an OFAC attorney in New York?
You should contact an OFAC attorney in New York immediately when there is any indication of sanctions exposure, such as a frozen bank account, a potential SDN match, a blocked transaction, or a notice from your financial institution or OFAC. Early legal intervention is critical in New York cases, where financial institutions are heavily scrutinized and enforcement actions often escalate quickly.
How are OFAC lawyers in New York different from general corporate attorneys?
OFAC lawyers in New York specialize in sanctions law, asset blocking, licensing issues, and federal enforcement actions. Unlike general corporate attorneys, they regularly work with OFAC, U.S. Treasury, and compliance teams at major financial institutions, and handle cases in the Southern District of New York, where a significant portion of U.S. sanctions litigation is litigated.
What are the risks of ignoring OFAC compliance requirements in New York?
Ignoring OFAC compliance can result in frozen assets, civil penalties reaching hundreds of thousands of dollars per violation, and potential criminal liability in serious cases. In New York, where global banks and financial institutions operate under strict regulatory oversight, even minor compliance failures can trigger OFAC investigations and enforcement actions by the Department of Justice.
