OFAC's FAQs Are Criticized as Misleading

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Date: 
June 8, 2017

A list of frequently asked questions (FAQs) recently issued by U.S. Treasury's Office of Foreign Assets Control (OFAC) are intended to clarify its process whereby it removes people from its list of Specially Designated Nationals and Blocked Persons (SDN).

According to OFAC, it removes hundreds of people and entities from the list each year, evidence, it says, that the list is not merely punitive but rather designed to motivate a change in behavior. A removal from the SDN list based on a thorough review that evaluations each request on its merits, applying consistent standards across all cases. Questions on the FAQ page address the entire de-listing process and include "Do I need to hire an attorney in order to file a petition for removal?" and "How long does the entire petition process take?" 

However, the questions and answers have been criticized as misleading. Although OFAC has in recent years de-listed hundreds of people and entities each year, that wasn't always the case. None were delisted in 2001 and 2002, for example, and just over 100 were delisted in 2009. In addition, despite OFAC's claim that the listings are geared to changing behavior, it seems unlikely given that the agency never reveals the specific reason for the listing. The agency also makes it difficult to hire an attorney to assist with a delisting application. A license from OFAC is required to authorize payments to a lawyer, and the license application process is lengthy and cumbersome. Most importantly, there is no relief for persons with names that are similar to a drug dealer or terrorist on the list, although financial institutions will likely refuse to deal with them. 

OFAC's de-listing procedures have long come under fire for the lack of due process and charities that are listed have the additional burden of having their funds frozen indefinitely.