What is the SDN list?
SDN stands for specially designated national. The Office of Foreign Asset Control (OFAC) places individuals and entities on this list for national security, foreign policy, and sanctions policy objectives. If someone is placed on the list, it means they have been acting against the foreign policy and sanctions policy of the United States and have effectively been walled off from the international marketplace, particularly the U.S. financial system. As the U.S. economy is a major player in the international business market, placement on the SDN list makes it exceptionally difficult to engage in international transactions, particularly in U.S. dollars.
Placement on and Removal from the SDN List
When OFAC adds an individual or entity to the SDN list, it provides information explaining the decision. Typically, one can find the reason for the placement on the SDN list by way of reports that the Department of Treasury puts out at the time of the designation. It is important to review these issues and address them in any requests for reconsideration or petition for removal.
To get a name removed from the SDN list, a person or entity must submit a petition for removal or a request for administrative consideration to OFAC. This administrative consideration must effectively state and argue that the person or entity has changed its behavior and will no longer engage in the prohibited activities. It is also necessary to show that they have divested from any potentially sanctionable activity after they incurred sanctions liability. Removal may also be possible if the individual or entity can provide evidence showing OFAC made an error in judgment in placing them on the SDN list.
After filing the request, OFAC reviews it and typically responds with numerous questions in an attempt to gain a more complete picture. This may happen several times. The entire process may take months or even years, depending on the complexity of the case and OFAC’s timeline.
What is an OFAC Administrative Subpoena?
An OFAC administrative subpoena is a legal request from the U.S. government to answer questions about activities or transactions that may have violated U.S. sanctions. The administrative subpoena requires an in-depth response to OFAC. At the time OFAC issues an administrative subpoena, no decision has yet been made by the government on any civil or criminal penalties involved in a potential violation of U.S. Sanctions.