A trading company's bank account is frozen. The freeze traces to an OFAC designation made months earlier. The company's management insists the designation is wrong – the named person has no ownership stake, and the address used by OFAC belongs to a former subsidiary. What comes next? The answer is a formal reconsideration request to OFAC, and how that request is constructed will largely determine whether the designation survives.
An OFAC reconsideration request (a formal petition asking the Office of Foreign Assets Control to review and, if warranted, revoke or modify a designation) is the primary administrative route for a designated party seeking removal from the SDN List (OFAC's list of Specially Designated Nationals and blocked persons). The process is governed by OFAC's own regulations under IEEPA and related statutes. As of February 2026, OFAC maintains a dedicated administrative process for reconsideration, and the quality of the evidence package submitted is the single greatest determinant of outcome.
This guide walks through each stage of an OFAC reconsideration request, identifies where petitions most commonly fail, compares the OFAC process with the parallel routes available under OFSI, the EU Council, and the UN Ombudsperson, and explains when to bring in sanctions counsel.
Step 1: Understand what a reconsideration request is – and what it is not
A reconsideration request is an administrative petition submitted directly to OFAC asking the agency to revisit a designation decision. It is not an appeal to a court, and it does not by itself suspend the legal effect of the designation while OFAC considers it. The SDN listing remains fully operative during the review period.
This distinction matters in practice. A company that submits a reconsideration request must simultaneously manage its frozen accounts, restricted counterparty relationships, and any reporting obligations – none of which pause while OFAC deliberates. We regularly advise clients to treat the reconsideration track and the operational continuity problem as parallel workstreams, not sequential ones.
Reconsideration is available both to the designated party itself and, in certain circumstances, to a third party with a direct interest in the designation (for example, a parent company whose subsidiary appears on the SDN List). The request is submitted in writing to OFAC's Office of Global Targeting, and OFAC is not bound by any statutory deadline for its response – meaning timelines can be lengthy. Plan accordingly.
A separate, related mechanism is the specific licence application. Where a business needs to conduct a defined transaction that the designation would otherwise block, a specific licence (a case-by-case authorisation to conduct an otherwise prohibited transaction) can sometimes be obtained even while reconsideration is pending. The two tracks are not mutually exclusive, and in our experience running them in parallel is often the right approach.
Step 2: Gather and organise the evidentiary record
The evidentiary record is the foundation of any reconsideration petition, and its quality determines whether OFAC has a credible basis to act. A weak or incomplete record will not persuade OFAC to revoke a designation it made on the basis of its own intelligence and analysis.
Before writing a single word of the petition letter, the practitioner's task is to map every factual assertion OFAC made in the designation – typically drawn from the publicly available designation notice and, where available, any blocking notice – and then to assemble documentary evidence that directly responds to each assertion. This is a document-first process. The legal argument follows the facts.
Useful categories of evidence include:
- Corporate records establishing ownership and control: shareholder registers, articles of association, shareholder agreements, board minutes, and official registry extracts
- Financial records: audited accounts, bank statements, and transaction records showing the absence of flows to or from the alleged basis for designation
- Third-party verification: certified translations of foreign-language documents, sworn affidavits, and independent auditor reports
- Communications records: e-mail or correspondence chains that contradict a factual finding made by OFAC
- Government records: official licences, regulatory approvals, or tax filings that confirm the legal status of the entity
One pattern we see repeatedly: clients arrive having already written a narrative letter without assembling the underlying documents. OFAC will not accept argument as a substitute for evidence. If the assertion is that a named individual no longer owns the company, the shareholder register and the registry extract must be in the bundle – a statement by the director is not enough on its own.
Record-keeping discipline also matters for the long term. Under US rules, relevant documents should be preserved for a substantial period from the date of the transaction or event to which they relate. The exact retention period applicable to your situation should be verified, but the general expectation is one measured in years, not months.
The position above covers the standard case. Your facts – the basis for designation, the jurisdictions involved, the nature of the underlying relationship – change the analysis materially.
For an assessment of your exposure and the strength of your evidentiary position, contact Calder & Vance at info@caldervance.com.
Step 3: Draft the petition letter – structure and substance
The petition letter translates the evidentiary record into a structured legal argument. It should be written by counsel, or at minimum reviewed by counsel, before submission. An unfocused or legally inaccurate petition can damage a subsequent reconsideration attempt if the first fails.
A well-constructed petition contains four parts. First, a factual background section that sets out who the petitioner is, the basis for the designation as stated by OFAC, and the relationship between the petitioner and any other parties affected by the designation. Second, a point-by-point response to each of OFAC's stated grounds, referencing the specific exhibit in the evidentiary bundle that addresses that ground. Third, a legal analysis section that explains why, on the facts presented, the designation criteria are not met or are no longer met. Fourth, the specific relief requested – typically full removal from the SDN List, but sometimes a modification of the designation (for example, correction of an identifying detail such as an address).
Two drafting errors are particularly damaging. The first is arguing generalities rather than addressing OFAC's stated basis point by point. The second is making factual assertions in the letter that are not supported by the exhibits. OFAC reviews the documents, not only the letter. Any inconsistency between the narrative and the documents undermines credibility across the whole petition.
Where the underlying facts are complex – for example, a multi-layered ownership structure spanning several jurisdictions – a clear ownership diagram, certified by a qualified professional, is worth including as a standalone exhibit. The purpose is to make OFAC's review as straightforward as possible. OFAC staff are experienced, but clarity is always an advantage.
Step 4: Submit the petition and manage the review period
Submission to OFAC's Office of Global Targeting is the formal trigger for the administrative review, and from that point the petitioner is in a waiting period that may extend for many months. OFAC will acknowledge receipt, but it does not publish a standard processing timetable for reconsideration requests. In our experience, straightforward petitions with clean evidentiary records tend to resolve faster than complex multi-party matters.
During the review period, OFAC may request additional information or clarification. Responding promptly and completely to any such request is important. A delayed or partial response signals disorganisation and can extend the review further. Build a response protocol into the matter plan from the outset.
Simultaneously, manage the downstream effects of the active designation. This means:
- Notifying financial institutions where accounts are frozen and providing the submission reference where possible
- Engaging with counterparties who have suspended dealings, providing them with a summary of the reconsideration request where appropriate
- Monitoring the SDN List for any changes to the designation entry – OFAC occasionally updates names, addresses, or identifying information during a review
- Preserving all new evidence that arises during the review period and flagging it to counsel for potential supplemental submission
If a transaction cannot wait for the reconsideration outcome, a specific-licence application for the particular transaction may be the right parallel track. Assess this with counsel early, because the licensing and reconsideration tracks have different evidentiary logics and should not be conflated.
If a transaction has already been flagged, or a reconsideration filing has been refused, an early review can preserve options that narrow with time. Contact Calder & Vance at info@caldervance.com to discuss your position.
How does OFAC's reconsideration process compare with UK, EU, and UN routes?
OFAC's administrative reconsideration process is broadly analogous to the delisting routes under OFSI, the EU Council, and the UN system – but the practical differences are significant enough that a multi-regime designation (which is common) requires a separately designed strategy for each regime.
Under OFSI, the UK financial-sanctions authority, a designated party may request a review of a designation by the Treasury, and there is also a judicial-review route through the UK High Court. The OFSI review process has its own procedural rules and timelines under the relevant thematic regulations made under SAMLA. One key difference from OFAC: OFSI applies an ownership and control test (the UK and EU test for whether a non-listed entity is caught through a listed person) that is not purely mechanical. Control – the ability to direct decisions, even without majority ownership – can be relevant. Under OFAC, the test is the 50 percent or more ownership threshold; control alone does not trigger the SDN rule. This divergence can produce different outcomes on the same set of facts.
Under the EU, a designated party may challenge a Council listing by way of an annulment action before the EU General Court. This is a judicial route, not an administrative one, and it proceeds under EU procedural law. The EU General Court has developed a body of case law on the evidentiary standards OFAC listings are required to meet. A party challenging both an OFAC and an EU designation simultaneously needs to sequence and resource both tracks. The standard of review, the evidence requirements, and the remedies differ.
The UN Ombudsperson route applies only to listings under the ISIL/Al-Qaida consolidated list. It is a structured administrative mechanism, separate from national-regime processes, and operates under Security Council resolutions. For a party listed under a country-specific or thematic UN regime, the route is a petition to the relevant Security Council sanctions committee through the Focal Point for de-listing. The UN process is generally slower and less transparent than OFAC's administrative process.
One cross-cutting principle: where the same designation basis exists in multiple regimes, a successful reconsideration in one regime does not automatically produce removal in another. Each competent authority makes its own determination. We have acted for clients in parallel OFAC and EU proceedings and the timelines, evidence requirements, and outcomes have diverged significantly in both directions.
What does this mean for a business designated under two or more regimes? The answer depends on which regime is causing the greater commercial harm and which track has the strongest evidentiary position. A realistic assessment at the outset of the matter determines the sequencing.
Risk flags: when a reconsideration request is not enough
Several fact patterns indicate that a reconsideration request alone will be insufficient and that additional or alternative strategies are needed.
The first is where OFAC's designation is based on classified or non-public intelligence that the petitioner cannot see and therefore cannot directly rebut. In this situation, the petition can still be valuable – it puts OFAC's public findings under pressure – but the practical ceiling on what evidence can be adduced is lower. Counsel needs to be realistic about this from the outset and factor it into the strategy.
The second risk flag is where the underlying facts that prompted the designation have not changed. A reconsideration request is not a challenge to OFAC's legal authority to designate; it is an argument that the factual basis for the designation is wrong or no longer accurate. If the facts are largely as OFAC stated them, the petition will fail. The appropriate path in that scenario may be a compliance programme overhaul, a corporate restructuring to remove the designable connection, or a negotiated settlement rather than a contested reconsideration.
The third flag is procedural. A petition that is submitted in an incorrect format, that omits required identifying information, or that includes self-contradictory exhibits can be returned or simply deprioritised. The practical standard for submission quality is high.
Fourth: do not underestimate the secondary-sanctions dimension. If the designated party has counterparties outside the United States, those counterparties may face exposure under OFAC's secondary-sanctions regime even after a successful US reconsideration, depending on the specific programme involved. In our cross-border practice, we consistently see businesses that resolve the US designation but fail to address the separate exposure that US secondary-sanctions rules create for their non-US trading partners. Addressing both at the same time is almost always more efficient.
A common objection: "Our situation is clear-cut; we do not need a lawyer"
One myth worth addressing directly: that a straightforward factual situation – clear evidence of no ownership, a demonstrable address error, an obvious case of mistaken identity – means the petition can be prepared and submitted without specialist input. This underestimates the process.
OFAC's reconsideration review is conducted by experienced staff working within a framework shaped by US foreign-policy considerations that are not always visible from the outside. A factually simple case can still fail on presentation – because the evidentiary standard was not met, because the petition was addressed to the wrong internal office, because supporting documents were not certified in a form OFAC accepts, or because the applicant's relationship to the designated entity was not adequately explained. We have seen apparently clean cases stall for months because of avoidable procedural errors.
The cost of a failed first petition is real. A second submission after an initial rejection faces a higher evidential burden and may signal to OFAC that the petitioner's record is unstable. Early investment in a well-constructed petition is almost always more cost-efficient than remediation after a refusal.
Related practices
- Delisting evidence package (Australia) – preparing compliant delisting evidence for the Australian autonomous-sanctions regime
- OFAC reconsideration: guide 4 – the next stage in this series, covering supplemental submissions and escalation
- OFAC reconsideration: guide 5 – advanced issues in multi-regime designation challenges