OFAC Unblocking Application Lawyer
A bank may block funds involved in a wire transfer after concluding that the blocking may be necessary to comply with U.S. economic sanctions regulations administered by the Department of Treasury’s Office of Foreign Assets Control (OFAC).
The Treasury Department’s OFAC sanctions target parties allegedly engaged in an activity that is contrary to U.S. national security and foreign policy interests. OFAC laws require the blocking of property (property usually meaning monies) when designated individuals, entities, or foreign governments have a stake in such property.
This means that if a designated or blocked party has an interest in property that comes into U.S. jurisdiction or possession/control of a U.S. person, that property must be blocked or frozen. The bank may also block the funds if it believes the transaction violates or may cause legal complications regarding U.S. sanctions.
These funds are required to be placed in a blocked account until a license is granted to unblock the funds.
CAN A BANK BLOCK MY FUNDS DUE TO US SANCTIONS?
Blocking property may be legally appropriate but there are also times where mistakes are made. Banks may not understand how to apply the relevant US sanctions regarding your property and funds. Additionally, mistaken identity or compliance screening software that sometimes produces false positive matches to the Specially Designated Nationals List (SDN List) may result in faulty blockings.
Property and transactions that conflict with OFAC regulations can be blocked or rejected by a shipper or financial institution. In cases where the property is blocked by mistake, the financial institution may not unblock the money without authorization from OFAC. Here, you would need to submit a license application known as an unblocking application to obtain authorization from OFAC so that the bank can release your funds.
WHAT IS THE PROCESS TO FILE AN UNBLOCKING APPLICATION WITH OFAC IN WASHINGTON, DC?
OFAC details the unblocking procedure under 31 C.F.R. § 501.806. An unblocking application is a license application that requests authorization to release your blocked funds. The information provided and the means of submission, via OFAC’s online portal, are also similar to a specific license application process. Once you submit, OFAC will review the transaction and the provided application to determine whether the blocking was appropriate.
HOW LONG DOES AN UNBLOCKING APPLICATION TAKE WITH OFAC?
A recently submitted unblocking application gets added to an existing queue of paperwork directly handled by the staff of OFAC licensing officers. Sometimes the timeline for processing is much longer than one would normally expect. It could take anywhere from six to thirty months to receive OFAC’s decision on an unblocking application.
Unfortunately for those who have had their funds blocked due to mistaken identity, there are no legal means to expedite the process. Filing an unblocking application with accurate and concise information, ideally with the help of legal counsel, may be your best chance at avoiding delays and ensuring timely processing.
WHO CAN FILE AN OFAC UNBLOCKING APPLICATION?
OFAC regulations permit any person that is a party to the transaction to request the release of the blocked funds. While this may be the case, you should consider whether it is worth your time or resources to pursue the release of the funds, whether you are an individual or a company. If you do decide to submit an unblocking application, you should be sure that none of the other parties to the transaction have already or are planning on doing so.
Submitting multiple unblocking applications to OFAC is a sure way of unnecessarily extending the wait time on the processing of the application. When OFAC receives multiple applications, discrepancies on provided facts may slow down and complicate a final decision by the OFAC licensing officer(s). In some cases, OFAC may request that one or more conflicting applications be withdrawn.
Before filing an unblocking application, all parties to the transaction must understand that only one party should submit an unblocking application to OFAC. Doing the contrary would be counterproductive to the cause of releasing the blocked funds in a timely manner.
WHAT SHOULD I SAY IN MY UNBLOCKING APPLICATION TO OFAC?
Providing proof to OFAC can be a hard and exhausting process. Where mistaken identity causes the blocking, all relevant information must be included in the application to show OFAC that no party with interest in the transaction is a target of U.S. sanctions to the extent that is prohibited by law.
The bulk of the submission may require the work of an experienced OFAC attorney who can properly conduct an analysis of the related contracts and documents of the transaction in an effort to bring forth the strongest arguments to support your requested release of funds.
The purpose of supplying this depth of detail in the written analysis is needed to provide reasons, coupled with compelling evidence, that justifies the release of the property. The unblocking application serves as an opportunity for you to highlight aspects of the transaction that may have caused the blocking of the funds. For instance, the transaction may have been permitted under a general license or exemption that was not evident to the intermediary bank that blocked the payment. This information would be relevant to OFAC’s determination to unblocking the funds.
These many matters must be considered when submitting an unblocking application to OFAC. Bringing your case to the OFAC Sanctions Lawyers at Zarkesh Law Firm, P.C. will allow us to work with you to assess the facts of your case to submit a comprehensive unblocking application to OFAC. We will diligently work with you to draft a convincing narrative for the licensing officers to understand what occurred to result in the blocking.