OFAC sanctions removal: asset unblocking procedure

Current situation overview

The U.S. Office of Foreign Assets Control (OFAC) is the agency responsible for implementing U.S. economic and trade sanctions. OFAC is only one of the regimes a designated person falls under at the same time: how they relate to one another, and in what order to work through them, is set out in the map of the sanctions cluster.

OFAC has the following powers

• freezing bank accounts and financial assets
• prohibition on conducting transactions with the object and/or person
• termination of SWIFT system access for banks
• prohibition on investments in sanctioned companies and/or sectors
• restriction on use of U.S. currency and financial system

The legal basis for challenging OFAC asset blocking is the Administrative Procedure Act, which allows challenging federal agency decisions if they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."

Based on more than 20 cases at our firm and available information on colleagues' cases, successful challenges can be built on the following arguments:

• grounds for blocking have ceased (resignation from position, company liquidation)
• court-ordered settlement (resignation from position, termination of contacts)
• OFAC error (mistaken identity)

Directly challenging OFAC's authority, or citing insufficient evidence, rarely works for an ordinary SDN designee: courts grant the agency broad discretion on national security matters. Success has come only in exceptional situations — where due process was violated (the Al-Haramain and KindHearts cases) and where the object of the sanctions itself fell outside OFAC's statutory authority (Tornado Cash, 2024–2025).

Administrative appeal procedure

The first step is filing an application for a specific or general OFAC license:

• Specific license: individual authorization for a particular transaction or activity
• General license: authorization for a certain type of transaction for all persons meeting established criteria

Judicial appeal

In case of OFAC denial, the next step is going to court:

• filing a lawsuit in U.S. federal court
• challenging OFAC actions based on the Administrative Procedure Act
• proving the illegality, arbitrariness, or unreasonableness of OFAC's decision

Most settlements on sanctions matters are concluded through judicial proceedings. These settlements typically include:

• Elimination of the root cause of sanctions imposition (e.g., ceasing certain activities)
• Adoption of negative covenants, such as commitments not to hold certain positions or contact sanctioned persons
• Consent to periodic monitoring by OFAC

Role of law firms

Law firms are permitted to represent sanctioned persons' interests in ensuring access to defense of their rights. This exception is provided in most sanctions programs and confirmed by General License No. 14 under many sanctions regimes.

Law firms may

• Advise on sanctions applicability
• File license applications
• Represent clients' interests in court
• Interact with OFAC on behalf of the client

Information requests

There is an option to send clarification requests to OFAC, but this procedure has significant limitations:

• Request review time is also approximately 18 months
• OFAC response content typically does not go beyond publicly available information in press releases
• In most cases, sending requests is impractical due to lengthy waiting times and predictable responses

Public sanctions-removal cases

Sanctions are removed regularly. Through the administrative reconsideration procedure (31 CFR 501.807), OFAC delists hundreds of individuals and companies from the SDN List every year; most of these cases are non-public. A few major removals are documented in detail and show which arguments and steps actually work. Below is a breakdown by mechanism.

Restructuring and exit from SDN control

The best-known corporate case is UC Rusal, En+ Group and JSC EuroSibEnergo. OFAC added them to the SDN List in April 2018 because of Oleg Deripaska's control and delisted them as early as 27 January 2019. The condition was restructuring: Deripaska reduced his direct and indirect stake and lost control, most of the board seats at En+ and Rusal went to independent directors (including U.S. and EU nationals), and a significant block of shares was voted by independent U.S. persons. Deripaska himself remained under sanctions — the removal applied to the companies that ceased to belong to him.

A similar mechanism worked for the Swedish refiner Nynas AB. It was blocked because Venezuela's PDVSA held at least 50% of it (the 50% rule). Under a scheme agreed with OFAC, PDVSA cut its stake to 15%, another 35% went to an independent Swedish foundation, and the board was reconstituted. On 12 May 2020 OFAC found the blocked person's control eliminated, and the company came out from under sanctions — in less than a month, unusually fast for a delisting.

Court victories over OFAC

The crypto mixer Tornado Cash was added to the SDN List in August 2022. Users challenged the listing in court, and in November 2024 the Fifth Circuit (Van Loon v. Treasury) held that immutable smart contracts are not the "property" of a foreign person within the meaning of IEEPA, so OFAC had exceeded its authority. On 21 March 2025 the agency delisted Tornado Cash, framing it as a discretionary decision. The developer Roman Semenov, however, remained under sanctions.

Earlier, courts also lifted sanctions on procedural grounds. In the cases of the charities Al-Haramain (Oregon) and KindHearts in 2008–2012, courts found that freezing assets without notice of the reasons and without an opportunity to respond violates the Fifth Amendment (due process), and that the blocking itself constitutes a "seizure" under the Fourth Amendment; the court found the "material support" language in Executive Order 13224 unconstitutionally vague. The Ninth Circuit upheld the Al-Haramain decision, and the government chose not to take the dispute to the Supreme Court.

Removal of entire sanctions programs

A removal can also cover an entire country program. Sanctions against Sudan were lifted effective 12 October 2017 — for the government's "sustained positive actions." After the fall of the Assad regime, by executive order of 30 June 2025 the U.S. president terminated the Syria sanctions program: 518 persons were removed from the SDN List, and the Syrian Sanctions Regulations were struck from the CFR. Targeted sanctions against Assad himself and his circle, human-rights violators, drug traffickers (Captagon) and entities linked to ISIS, al-Qaeda and Iran remained in force.

When a removal turns out to be reversible

Sanctions removal and a granted license are different instruments, and both are politically reversible. To the Israeli businessman Dan Gertler (sanctioned in 2017 for corrupt deals in the DRC) OFAC issued a license on 15 January 2021 permitting operations for one year, but he was not removed from the SDN List. As early as 8 March 2021 the Biden administration revoked that license. A license is not equivalent to delisting, and a change of administration can reverse the decision.

OFAC practice: Russia, Iran, China

For designees from Russia, Iran and China the set of working tools differs from the high-profile cases above. Removal on the merits is hard to obtain, and more often the answer lies in restructuring, licenses and correcting identification errors. Below is the practice across three tracks.

Russia: corporate restructuring and rare removals for individuals

The only major Russian corporate delisting is UC Rusal, En+ Group and JSC EuroSibEnergo (January 2019). The removal came at the price of unprecedented transparency: independent boards of directors, continuous auditing, certification and regular reporting to OFAC. It is a model of how eliminating SDN control opens the way off the list.

Deripaska himself litigated against the U.S. Treasury in parallel and lost. The District Court for the District of Columbia in 2021, and then the appellate court in 2022, dismissed the suit, finding the listing supported by "substantial evidence"; the Supreme Court declined to hear the appeal. U.S. courts give OFAC broad discretion, so a challenge on the merits rarely works for a Russian individual.

Removals of individuals do happen, though. On 18 March 2026 OFAC removed from the SDN List Evgenia Tyurikova, the former head of Sberbank Private Banking (sanctioned since February 2023); she was represented by a law firm, and the Treasury, as usual, did not disclose the reasons for the removal. This is one of the rare examples of a Russian private individual being delisted under the program after 2022.

When removal is unrealistic, licenses come into play. Deripaska's GAZ Group never left the SDN List, but OFAC renews general licenses (the GL 13 and 15 series) for divestment and wind-down — selling stakes and winding down operations — year after year. For most Russian designees after 2022 the real tools are precisely licenses: divestment, wind-down and humanitarian operations — even where delisting is unattainable.

Iran: the major removals were political and reversible

The largest removal of Iranian sanctions was political. On the JCPOA Implementation Day, 16 January 2016, OFAC removed from the lists 59 individuals, 385 companies, 76 aircraft and 227 vessels. The relief did not last long: after the U.S. withdrew from the deal (EO 13846, August 2018), the sanctions were restored, and by 5 November 2018 more than 700 entries had been re-added.

Iranian banks have almost never won removal through the courts in the U.S. itself: Bank Melli (EO 13382, 2007) and Bank Saderat (EO 13224, 2007) remain on the list, and U.S. courts consistently side with OFAC. In Europe the odds are better — in 2013 the Court of Justice of the EU annulled, and the UK Supreme Court quashed, the sanctions against Bank Mellat for lack of evidence and procedural violations.

China: removal follows the end of the violation

The Chinese cases show that as soon as the violation itself stops, removal becomes possible. COSCO Shipping Tanker (Dalian) was added to the SDN List on 25 September 2019 for carrying Iranian oil; OFAC issued a wind-down license, and as early as 31 January 2020 the company was removed from the list — administratively, with the caveat that its course on Iran was not changing.

Most Chinese listings are tied to secondary sanctions — for helping Iran, Russia or North Korea. Bank of Kunlun was cut off from the dollar system back in 2012 under CISADA, and in 2019 was added to the CAPTA List; OFAC sanctions Chinese buyers of Iranian oil, independent "teapot" refineries and carriers. The only way out here is to stop the sanctioned operations; at the same time Beijing pushes companies to resist through its own anti-foreign-sanctions law. More detail is in the article on restrictions at Chinese banks.