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OFAC Delisting Process

This page is intended to provide an overview of OFAC sanctions and the legal processes by which sanctioned companies, property, and people can be removed from the OFAC list. However, every case is unique and requires particular attention to detail. If we can be of assistance in an OFAC matter, please contact one of the attorneys in our sanctions practice group.

Individuals and companies who are sanctioned by OFAC are said to be “designated” and they are added to the OFAC list, which is formally known as the List of Specially Designated Nationals and Blocked Persons (“SDN List”). Such individuals and companies are referred to as SDNs, and their property is referred to as “blocked.” (Please see our OFAC FAQs for discussions of SDNs and blocked property.) SDNs can seek removal from the OFAC list by submitting a delisting petition.

I. Administrative Removal: the OFAC Delisting Petition

Who can seek removal from the SDN List and how to start. Any person or entity listed on an OFAC sanctions list (e.g., the SDN List) may ask OFAC to be removed by filing a written “petition for administrative reconsideration.” The procedure is codified at 31 C.F.R. § 501.807, and OFAC also publishes a plain-English page with the mechanics (where to send/what to include). Once drafted (see below) the petition is emailed to OFAC to initiate the review.

What to argue and what to include in a delisting petition to OFAC. Petitions typically proceed on one or more of three theories: (i) mistaken identity (they listed the wrong party), (ii) wrong facts (OFAC simply got it wrong), or (iii) changed circumstances (e.g., cessation of the targeted conduct, severed relationships, governance and compliance reforms). Of these, the third path generally has the greatest chance of success. It is difficult to argue that OFAC got the facts wrong, because the petitioner has no right or ability to know the basis of the designation. Unlike discovery or disclosure that occurs in a court proceeding, OFAC is not required to inform the sanctioned party of the basis for the designation, which often includes classified intelligence materials. However, changed circumstances, if properly documented, can be a very effective means of convincing OFAC to remove a designation. In the past, successful delisting petitions and unfreezing of blocked assets have been based on changed ownership, changed business practices, and divorce, among other grounds.

OFAC encourages supporting documentation: substantive narrative explanations that clearly frame for OFAC the relevant issues; corporate records; bank records; contracts; affidavits; compliance program materials; and any third-party attestations. Generally speaking, the process involves an iterative ongoing exchange in which OFAC will request further documentation and explanation over a period of time.

Process flow and timeline of a delisting petition. Upon receipt of a petition, OFAC coordinates both internally and with other government agencies. OFAC analysts review the petition in light of the information available to them, including opensource, law enforcement, and often classified information. There is no fixed deadline; timing ranges from months to much longer depending on complexity and whether classified or foreign-partner material must be addressed. The regulations require a written decision at the end of OFAC’s review, but that often takes a year or more. If the request is denied, the petitioner may submit additional materials and try again, or may bring a judicial action, as discussed below. In parallel, parties sometimes seek specific licenses to authorize certain otherwise-prohibited transactions while the delisting request is pending.

Possible outcomes of a delisting petition. (1) Full removal (name is taken off the list); (2) narrowing or technical correction (e.g., update identifiers); or (3) denial, with or without guidance on deficiencies. OFAC’s public-facing resources (including the State Department summary page) reiterate these basic contours and the single point of entry via email .

II. Judicial Review if OFAC Denies the Delisting Petition

When you can sue and where. If OFAC denies a delisting petition (or fails to provide an answer in a sufficiently long period that their non-action is deemed an effective denial) the listed party may bring an action in federal district court under the Administrative Procedure Act (APA) seeking to set aside the denial as unlawful. Courts most commonly hear these cases in the federal court in Washington, D.C. (U.S. District Court for the District of Columbia), but the venue can vary.

Standard of review: “arbitrary and capricious.” Courts review OFAC’s decision based on the administrative record and ask whether the agency has acted in an arbitrary and capricious manner in making its determination. This is a very deferential standard of review which will confirm the agency decision so long as the agency examined relevant data and articulated a rational connection between the facts found and the choice made. In OFAC matters, the standard is generally even more deferential because OFAC decisions are foreign policy determinations which the U.S. Constitution reserves for the executive branch. The party bringing the challenge (the “petitioner”) must demonstrate that OFAC’s administrative denial of the delisting petition was arbitrary, capricious, an abuse of discretion, contrary to law, or unsupported by substantial evidence in the administrative record. If OFAC can articulate a rational reason for the designation and can demonstrate that it reviewed and rationally responded to any rebuttal evidence presented by the petitioner, then the legal challenge will be rejected by the court. In practice, petitioners face an uphill climb unless they can show gaps in reasoning, reliance on stale or incorrect facts, or failure to consider material rebuttal evidence (although courts have rejected OFAC’s legal theories and determinations in certain cases).

Due process: notice and an opportunity to respond. OFAC often relies on classified information in rendering designations. While petitioners will not be afforded access to these materials, courts have required procedural safeguards such as unclassified summaries of the classified materials so petitioners can meaningfully rebut allegations and have a fair chance to submit counterevidence. Numerous federal appellate courts have ruled that OFAC may rely on undisclosed classified material but must provide adequate summaries to allow the petitioner to mount a defense and rebut the allegations. Where a petitioner can show that OFAC has failed to respond to rebuttal evidence, the courts will remand (send the case back to OFAC) for OFAC to consider the evidence. Other successful challenges have focused on claims that the information OFAC relied upon is stale, and that OFAC failed to take into account changes in the conduct of the petitioner. It is quite rare for a court to overrule OFAC altogether; the more common outcome is remand with a direction to consider certain evidence before rendering a new decision.

Practical takeaways for petitioners and litigants.

Create a strong factual record with OFAC. Treat the petition like the first judicial brief: tie each allegation in the original designation criteria to documentary rebuttals and verifiable reforms (e.g., governance changes, terminated relationships, independent audits). This both improves your odds at OFAC and builds a cleaner record for APA review. It is crucial to back up factual assertions with evidentiary proof wherever possible. The addition of reputable and experienced third-party investigators and counsel, while not required, is generally advisable. Sanctions is a very specialized area of the law and knowing what OFAC is looking for and how to present the information can be crucial to the success of a petition. It is inadvisable to proceed without counsel or to engage counsel who do not routinely practice in sanctions matters.
Address chronology. Demonstrate changed circumstances with dates and corroboration; As noted, stale allegations are a frequent weak point you can exploit.
Anticipate classified-information issues. Ask OFAC for the most detailed unclassified statement of reasons it can provide and respond point-by-point; courts have required meaningful notice in this space.
Expect deference—but insist on reasoned analysis. The APA standard is deferential, yet agencies must engage with contrary evidence and explain why listing criteria remain met. Building a meticulous record improves prospects both at OFAC and on remand.

The foregoing is for informational purposes only. It is not intended as legal advice and no attorney-client relationship is formed by the provision of this information.