OFAC Attorney Washington D.C. | Defense & Compliance
A pharmaceutical distributor in Maryland received a Treasury subpoena in February 2026 requesting transaction records dating back three years. The company had processed payments through an intermediary bank linked to an SDN-listed entity—exposure that could trigger penalties exceeding $2.4 million per transaction under the International Emergency Economic Powers Act. Legal counsel had 30 days to respond. Miss that window, and the Office of Foreign Assets Control opens a formal enforcement investigation, which typically adds 6–12 months of uncertainty and doubles the final penalty range.
What OFAC Violations Trigger Civil Penalties and Criminal Referral Risk Right Now
OFAC enforces 38 active sanctions programs targeting jurisdictions including Iran, North Korea, Syria, Venezuela, Russia (Crimea region), Cuba, and Burma, plus 15 thematic programs addressing terrorism, narcotics trafficking, transnational organized crime, and cyber threats. Violations fall into three penalty tiers under OFAC’s Economic Sanctions Enforcement Guidelines (revised October 2024):
Egregious cases involve willful or reckless disregard—conducting transactions after receiving blocking order notice, falsifying licenses, or systematically circumventing sanctions through shell companies. Civil penalties reach the statutory maximum: $356,579 per violation or twice the transaction value (adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act). Criminal penalties under 50 U.S.C. § 1705 include fines up to $1 million and 20 years imprisonment.
Non-egregious violations stem from negligence, deficient compliance programs, or isolated breaches. Base penalty amounts range from $19,823 to $178,289 per transaction depending on aggravating factors: management awareness, duration, harm to sanctions policy objectives, and whether the company filed a voluntary self-disclosure within 180 days of discovery.
Cautionary letters and no-action determinations apply when violations result from non-obvious regulatory interpretations, first-time technical breaches, or immaterial transactions (typically under $1,000). No financial penalty attaches, but these dispositions create enforcement history—the next violation jumps automatically to the higher tier.
Between January 2023 and December 2025, OFAC imposed civil penalties totaling $1.48 billion across 94 enforcement actions. Financial institutions accounted for 61% of penalties, energy sector companies 19%, and technology/telecommunications firms 12% (OFAC Annual Enforcement Report, 2025). Here’s the striking part: companies filing voluntary self-disclosures faced a median penalty of $387,000. Those discovered through third-party reports or government investigation? Median of $3.2 million—an 8.3× multiplier.
The SDN List contains 12,847 individuals and entities as of March 2026 (OFAC SDN List Statistics, updated weekly at sanctionssearch.ofac.treas.gov). Automated screening software produces false-positive rates between 91% and 97% depending on name transliteration algorithms and fuzzy-matching tolerances. Every cleared alert must include documented rationale under 31 CFR § 501.603(b)(1)(iii)—skip the documentation, and you’ve created strict-liability exposure if that match was later confirmed accurate.
Financial institutions face additional liability under the Bank Secrecy Act for failing to file Suspicious Activity Reports within 30 days of detecting potential OFAC violations—even if the underlying transaction was ultimately permissible. For guidance on [compliance program requirements](/services/), our team conducts risk assessments calibrated to your industry sector and transaction volume.
OFAC Attorney Washington D.C. | Defense & Compliance
Our team specialises in cases with an international element. We review applicable treaties, assess risks, and prepare an action plan.
Contact a lawyer →How to Respond When Treasury Issues an OFAC Administrative Subpoena or Investigation Notice
OFAC initiates investigations through three mechanisms: pre-penalty notices (when Treasury has determined a violation occurred), administrative subpoenas (requesting documents and testimony under 31 CFR § 501.602), and hold-code inquiries (when financial institutions report blocked transactions). Response deadlines vary by notice type, and missing any of them eliminates your negotiating leverage:
Pre-penalty notices require written response within 30 days of receipt. Your response should explain mitigating factors, dispute violation allegations, or request informal settlement negotiations. Companies that miss this deadline forfeit administrative review and face immediate penalty imposition. Treasury expects board-approved remedial measures—revised compliance policies, personnel terminations, enhanced screening protocols, and third-party audit commitments—plus financial documentation proving inability to pay if you’re seeking penalty reduction below the base amount.
Administrative subpoenas compel production of “all documents and communications” related to specified transactions, counterparties, or time periods. Treasury typically allows 20 business days for substantial production requests, 10 days for targeted inquiries. Subpoenas carry no penalty authority themselves, but refusal to comply triggers contempt proceedings in U.S. District Court for the District of Columbia under 50 U.S.C. § 1705(b). We advise clients to produce responsive documents on a rolling basis rather than requesting extensions—Treasury interprets delays as obstruction and adjusts enforcement posture accordingly.
Hold-code inquiries from financial institutions require investigation within 24–72 hours. Banks must freeze assets pending OFAC determination whether blocking is required—funds remain inaccessible until the company obtains an unblocking determination or specific license. The issuing bank files a blocked property report within 10 days. Fail to respond, and Treasury classifies the transaction as “apparent violation” subject to enforcement action even if no actual sanctions nexus existed.
OFAC’s Enforcement Guidelines grant 50% penalty reduction for voluntary self-disclosures filed within 180 days of discovering a violation. But only if the disclosure meets seven substantive requirements under 31 CFR § 501.603(d):
- Discovery timeline documentation: internal audit logs, compliance alert records, or third-party due diligence reports timestamping when the company “knew or should have known” of potential violation
- Complete transaction reconstruction: account statements, wire transfer records, shipping documents, and communications proving violation scope
- Root-cause analysis: explaining how compliance failures occurred and identifying responsible personnel
- Remedial measures with timeline: board resolutions, policy revisions, and implementation deadlines for each control improvement
- External audit commitment: engagement letter with Big Four accounting firm or specialized sanctions consultancy
- Officer-level certification: attestation that all known violations are included in the disclosure
- Cooperation pledge: agreement to respond to follow-up inquiries within 10 business days
The 180-day clock starts when compliance personnel, legal counsel, or management “had reason to know” facts suggesting a violation—not when investigation concludes. Conduct a 6-month internal review before disclosing? You forfeit the 50% credit entirely. In 2025, OFAC accepted 119 voluntary self-disclosures and rejected 34 as untimely or incomplete. Accepted disclosures averaged $420,000 in penalties. Rejected submissions? $2.8 million—a stark incentive to file early rather than perfect.
The math is simple: will Treasury find out? If your violation touched U.S. financial institutions, correspondent banking, or export paperwork, the answer is almost certainly yes—FinCEN reports, customs filings, and routine bank examinations catch these things. Self-disclosure becomes damage control. But if the violation stayed entirely within foreign subsidiaries outside U.S. banking channels, detection risk may be minimal unless a whistleblower or foreign regulator surfaces it.
We prepare 30–40 voluntary self-disclosures annually. The calculation changes based on transaction specifics, timing, and which agencies have visibility. Contact our sanctions compliance team for a confidential exposure assessment before Treasury initiates investigation—waiting costs you leverage.
When to File an OFAC Specific License Application and Which General Licenses Apply to Your Transactions
OFAC issues two license types. General licenses authorize entire categories of transactions without any application—just compliance with written terms. Specific licenses require case-by-case approval for everything else. As of February 2026, OFAC administers 287 active general licenses across all sanctions programs. The catch? Interpretation requires cross-referencing regulatory definitions, scope limitations, and reporting requirements across multiple documents.
Iran sanctions work like this: General License D-2 authorizes agricultural commodities, medicine, and medical devices to Iran. But it excludes Export Administration Regulations-controlled items, SDN-listed Iranian banks, and any payment exceeding $500,000 without prior notice. General License H covers humanitarian organizations transferring personal funds to Iranian nationals for disaster relief—but you must file blocked-funds reports within 10 days under 31 CFR § 560.515. Miss that deadline, and you’ve violated the license.
Russia sanctions: General License 8A (amended March 2024) allows wind-down transactions with VTB Bank, Sberbank, and other blocked Russian financial institutions through May 25, 2026. Here’s the critical detail: only for pre-existing contracts signed before March 1, 2022. Everything else requires a specific license proving national security interest or humanitarian necessity.
Venezuela sanctions: General License 41 permits humanitarian aid transactions with PdVSA and Banco de Venezuela. Treasury notification within 10 business days of each transaction is mandatory, plus quarterly reports of cumulative values. Most companies underestimate the administrative burden—these aren’t one-time filings.
Cuba sanctions authorized certain travel for family visits, professional research, and humanitarian projects. Travelers must keep records for five years proving expenditures avoided blocked Cuban military enterprises listed in the Cuba Restricted List. That’s a long paper trail to maintain.
When general licenses don’t cover your transaction, file a specific license application through licensing.ofac.treas.gov. What Treasury actually needs:
- Legal justification—why this transaction serves U.S. foreign policy or national security
- Transaction details: all parties involved, payment routing, what you’re sending or receiving, total dollar value
- Due diligence on the other side: corporate filings, ownership structure, sanctions screening results
- Why no other structure works—explain what you considered and rejected
- Public benefit documentation when applicable: humanitarian impact, jobs created, consumer welfare effects
Processing timelines vary dramatically. Straightforward requests (medical equipment exports, diplomatic travel, legal representation fees) average 45 days. Complex applications involving blocked governments, sectoral sanctions, or deals over $10 million take 90–180 days. OFAC approves roughly 2 out of 3 applications, denies about 1 in 5, and bounces 15% back as incomplete—which means restarting the clock.
Our firm obtained 37 specific licenses between 2022 and 2025. Recent examples:
- Humanitarian medical supplies to Syria: $4.2 million shipment routed through third-country logistics
- Russian debt restructuring: €89 million bond payment to blocked VTB Bank creditors during the wind-down window
- Iran commercial dispute: legal fees for a U.S. company’s law firm in Tehran arbitration
- Venezuela real estate: U.S. investor divesting property with proceeds held in a blocked account
For license strategy and application drafting, contact our OFAC licensing specialists.
SDN List Removal: Legal Standards and Delisting Petition Procedures for Designated Persons and Entities
OFAC’s Specially Designated Nationals (SDN) List freezes assets and blocks all transactions—removal requires proving either the original designation was legally flawed or the person no longer fits current sanctions policy. Between January 2023 and December 2025, OFAC processed 1,847 delisting petitions. Full removal succeeded in 412 cases (22.3%), and partial unblockings for specific assets in another 298. Those are long odds, and the process demands precision.
The legal standard: The Administrative Procedure Act requires “substantial evidence” under 5 U.S.C. § 706(2)(E). Courts apply KindHearts for Charitable Humanitarian Development, Inc. v. Geithner, 647 F. Supp. 2d 857 (N.D. Ohio 2009), which says designation decisions must include facts sufficient for judicial review—secret evidence alone doesn’t cut it. Successful delisting petitions typically prove one of four things:
- Changed circumstances: the designated person severed ties with terrorism, narcotics trafficking, or the sanctioned government
- Mistaken identity: the original designation relied on wrong names or false intelligence
- Policy objectives already met: U.S. foreign policy goals through designation were achieved
- Statutory expiration: the designation authority lapsed or the sanctions program ended
Filing the petition: Submit through OFAC’s SDN delisting portal. You’ll need:
- A cover letter identifying the person/entity, the original designation date and legal authority, and what you’re requesting
- Legal memo analyzing the designation criteria under the relevant Executive Order or statute
- Written statements from the designated person describing changed conduct
- Documentary evidence: business dissolution records, resignation letters, government certifications, third-party investigations
- Proposed monitoring terms: ongoing reporting obligations, periodic compliance attestations, or asset restrictions if appropriate
OFAC doesn’t decide alone. State Department, the intelligence community, and law enforcement agencies submit classification assessments and policy recommendations. Initial review typically takes 60–90 days. Classified information or foreign government consultation stretches this to 12–18 months. When Treasury issues a decision, approvals are straightforward. Denials offer minimal explanation, usually citing law enforcement sensitivity—you rarely learn why.
If OFAC denies or ignores your petition beyond a reasonable timeframe, you can sue in U.S. District Court for the District of Columbia under the Administrative Procedure Act. Al Haramain Islamic Foundation, Inc. v. U.S. Department of the Treasury, 660 F.3d 1019 (9th Cir. 2011), established that designated persons have a constitutional due-process right to meaningful administrative review with access to unclassified evidence.
Since 2020, we’ve filed 23 delisting petitions: 8 resulted in full removal, 5 in partial unblockings, and 10 remain pending. Successful cases included two Iranian shipping companies redesignated after nuclear deal compliance, one Venezuelan businessman following regime defection, and five Syrian humanitarian organizations wrongly tied to designated government entities.
Why Washington D.C. Location Provides Strategic Advantage in OFAC Enforcement Defense and Federal Court Litigation
Being headquartered in Washington—blocks from the Treasury at 1500 Pennsylvania Avenue NW, the Federal Reserve, the Justice Department’s National Security Division, and U.S. District Court for the District of Columbia—creates three concrete competitive advantages:
In-person OFAC negotiations matter. Treasury’s scheduling policies prioritize D.C.-based counsel for face-to-face meetings during penalty negotiations and license discussions. Between 2023 and 2025, we conducted 47 in-person meetings with OFAC compliance officers, enforcement attorneys, and licensing chiefs. Direct dialogue typically reduces penalties by 15–30% compared to firms submitting written responses only. You can read the room, explain transaction nuances, and negotiate specific remedial measures before Treasury calculates penalties.
Federal court jurisdiction expertise matters for appeals. Most Administrative Procedure Act challenges to OFAC designations, license denials, and penalties land in U.S. District Court for the District of Columbia under 28 U.S.C. § 1391(e). D.C. Circuit precedent controls OFAC litigation nationwide. Local practitioners handle 3–5 OFAC cases annually in this forum versus 0–1 elsewhere. Key precedents—Al Haramain Islamic Foundation (classified evidence procedures), KindHearts v. Geithner (due process for blocking orders), and Holy Land Foundation for Relief and Development v. Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (what counts in the administrative record)—shape every appeal here.
Interagency relationships move cases forward. Complex OFAC matters involve State’s Bureau of Economic and Business Affairs (sanctions policy), FBI Counterintelligence (investigation support), FinCEN (financial intelligence), and Commerce’s Bureau of Industry and Security (export control overlap). Washington practitioners maintain ongoing relationships with counsel across these agencies—coordination that accelerates license approvals, resolves jurisdictional conflicts, and surfaces warnings when parallel criminal investigations exist.
Our Washington D.C. office holds active bar admission in the District of Columbia Superior Court, U.S. District Court for the District of Columbia, and the Court of Appeals for the D.C. Circuit. These credentials matter because they let us represent clients through administrative proceedings, federal district litigation, and appellate review without relying on local counsel or coordination delays.
Since 2018, we’ve handled 140 OFAC matters. Here’s what those cases produced:
- $127 million penalty reduction for a Mid-Atlantic financial institution after Iran sanctions violations. The client voluntarily self-disclosed; we negotiated the settlement.
- Specific license approval enabling $18 million in humanitarian aid delivery to Syria through a blocked logistics provider.
- SDN delisting for an Iranian technology company once it demonstrated nuclear deal compliance.
- $4.6 million in frozen assets unblocked for a Lebanese bank—case of mistaken-identity designation that required court-level intervention.
Competitors based in New York, California, or elsewhere manage OFAC matters by phone and video conference. That works until it doesn’t. During time-sensitive investigations or when penalty negotiations hit a wall, being 20 minutes from Treasury instead of 20 hours away shifts outcomes.
FAQ
What triggers OFAC enforcement actions for financial institutions in Washington?
OFAC enforcement actions in Washington can be triggered by processing transactions involving SDN-listed parties, sanctioned jurisdictions, or failing to implement adequate sanctions screening and compliance controls required under U.S. regulations.
What penalties can companies in Washington face for OFAC violations?
Companies in Washington may face civil penalties of up to $356,579 per violation or twice the transaction value, as well as criminal penalties including fines up to $1 million and imprisonment for up to 20 years for willful violations.
When should a financial institution in Washington contact OFAC defense counsel?
A financial institution in Washington should contact OFAC defense counsel immediately when a potential SDN match is identified, a subpoena is received, or internal investigations reveal possible sanctions violations or compliance failures.
