An OFAC match means a U.S. financial institution’s sanctions-screening software has flagged your name, address, or other identifying information as a possible hit against the Treasury Department’s Specially Designated Nationals and Blocked Persons list. Most of these matches are false positives caused by fuzzy-matching algorithms that are deliberately over-inclusive. What happens next depends on whether the institution rejected the transaction (in which case the funds are returned) or blocked it (in which case you’ll need to ask OFAC to release them).
Why Your Name Got Flagged
Every U.S. financial institution is required to screen transactions against the SDN list, maintained by the Office of Foreign Assets Control at the U.S. Department of the Treasury.1Office of Foreign Assets Control. Who Must Comply With OFAC Sanctions Banks run this screening through interdiction software that uses fuzzy matching to catch misspellings, transliteration differences, and name variations.2BSA/AML Manual. Office of Foreign Assets Control New accounts are screened at or near opening; wire transfers are checked before they go out.
These systems catch a lot of innocent people. A properly calibrated system still produces a false positive rate of roughly 5 to 6 percent, and poorly calibrated legacy systems can flag more than 95 percent of their hits incorrectly. A large bank running over 100 million screening scenarios a day may generate around 1,200 alerts daily, most of them people who happen to share a name with someone sanctioned. If you were flagged, the odds heavily favor mistaken identity.
Blocked or Rejected: The Difference That Sets Your Timeline
OFAC treats flagged transactions in two very different ways, and the label determines how quickly you see your money.3Office of Foreign Assets Control. Blocking and Rejecting Transactions
A rejected transaction happens when the underlying activity is prohibited by sanctions but there’s no blockable interest in the funds themselves. The bank sends the money back to the originator. That return is relatively quick once the bank processes it.
A blocked transaction is more serious. The funds involve someone on the SDN list or otherwise subject to an asset freeze, and the bank seizes and holds them. The money cannot be returned to the sender or delivered to the recipient until OFAC authorizes release. The bank must file a blocking report with OFAC within 10 business days of the block, and the freeze has no automatic expiration.4eCFR. 31 CFR 501.603 – Reports of Blocked, Unblocked, or Transferred Blocked Property It stays in place until OFAC acts.
Ask your bank which category applies. If your transaction was rejected, you’re waiting on bank processing. If it was blocked, you need to petition OFAC directly.
Getting Blocked Funds Released After a False Positive
If your funds were blocked because your name resembles a name on the SDN list rather than because you actually are that person, the fastest route is the compliance release procedure. Federal regulations at 31 CFR 501.806 exist specifically for mistaken-identity and typographical-error cases.5eCFR. 31 CFR 501.806 – Procedures for Unblocking Property Believed to Have Been Blocked in Error
Send an email to OFACReport@treasury.gov with the subject line “31 CFR 501.806—Request for a Compliance Release.” Include:
- Your name, address, telephone number, and email address
- The name of the institution holding the funds, the estimated value in U.S. dollars, and the date the property was blocked
- A copy of a valid government-issued ID and your Social Security number or employer identification number
- The ORS identification numbers from the institution’s initial blocking report, if you can get them from your bank
- A description of the underlying transaction and a narrative explaining why you believe the block was a mistake
OFAC may come back with a request for more information. If it concludes the property should be released, it will direct the institution to unblock the funds and return them. The narrative is the part that matters most. A short, clear explanation of who you are, what the transaction was for, and why you are not the sanctioned party gives the reviewing officer what they need to close the file.
When a Specific License Is the Right Path Instead
The compliance release procedure is designed for false positives. If your situation is different — the transaction itself touches a sanctions program and needs authorization to proceed — you need a specific license, which is a case-by-case OFAC authorization for a transaction that would otherwise be prohibited.6U.S. Department of the Treasury. OFAC Specific Licenses and Interpretive Guidance
Before applying, check whether a general license already covers your situation. General licenses are blanket authorizations written into OFAC’s regulations, and OFAC will not issue a specific license when a general license already applies. If none does, submit the application through OFAC’s online portal at licensing.ofac.treas.gov, either as a guest or with a registered account.7Department of the Treasury. OFAC Licensing Portal
You’ll receive a Case ID that lets you track status online.8U.S. Department of the Treasury. OFAC – Application – Check Application Status Timing varies with complexity, interagency coordination, and the volume of similar applications in the queue.9Office of Foreign Assets Control. Frequently Asked Questions Expect weeks to months. If reviewers need clarification, you’ll get a request for additional information. An approved application produces a specific license that legally authorizes the bank to release the funds.
If OFAC Says No
You can ask OFAC to reconsider. Send a written petition by email to OFAC.Reconsideration@treasury.gov. OFAC does not take reconsideration requests by phone.10Office of Foreign Assets Control. Filing a Petition for Removal From an OFAC List
Include your identifying information, a copy of government-issued ID, the date of the OFAC action, and a detailed explanation of why the decision should be revisited, along with any evidence that the basis for the block was wrong or that circumstances have changed. If a lawyer is representing you, include a signed authorization. OFAC generally acknowledges receipt within seven business days; if you hear nothing after 10 business days, resend the petition to the same address.
There’s no fixed deadline for a final answer. If OFAC needs more information, its first questionnaire typically arrives within 90 days of the petition. The overall timeline depends on interagency consultation, the complexity of the facts, and how fast you respond to follow-up requests.
OFAC Alerts on Your Credit Report
Sanctions screening also runs when lenders pull credit, and a potential SDN match can attach to your credit file. That produces loan denials and mortgage delays that have nothing to do with your actual credit history.
OFAC does not maintain your credit report and cannot remove the alert.11Office of Foreign Assets Control. How Can I Get The OFAC Alert Off My Credit Report You have to dispute the alert with the credit reporting agency that issued the report. Under the Fair Credit Reporting Act, the bureau must reinvestigate within 30 days and verify, correct, or delete the disputed information.12Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy If it can’t verify the match, it has to remove the alert.
The Consumer Financial Protection Bureau can help with the dispute process at 855-411-2372. An OFAC alert on a credit report sometimes points to identity theft rather than a name coincidence, so it’s worth checking whether someone else has been using your Social Security number.