Specially Designated Nationals List: Search, Penalties, Removal

The Specially Designated Nationals and Blocked Persons List is a database maintained by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) that names individuals, businesses, and organizations U.S. persons are barred from doing business with. Anyone on the list has their U.S.-connected assets frozen, and violations carry civil penalties up to $377,700 per transaction or criminal penalties of up to $1 million and 20 years in prison for willful offenses.¹ The list is free to search through OFAC’s online tool, and anyone who believes they were wrongly designated can petition OFAC for removal.

Who Gets Placed on the List

OFAC’s authority comes from presidential national emergency declarations and the regulatory framework in 31 C.F.R. Chapter V.² Those powers let the agency freeze assets and impose trade restrictions almost immediately when a foreign threat emerges.

Designations cover a wide range of targets: governments and officials of comprehensively sanctioned countries, businesses those governments own or control, drug trafficking networks, weapons proliferators, and organizations tied to terrorism. OFAC also lists individuals and shell companies acting as intermediaries for sanctioned parties, since front operations are the most common way blocked persons try to move money through U.S. banks.

How To Search the SDN List

OFAC provides a free Sanctions List Search tool on the Treasury Department’s website. The tool covers both the SDN List and the Non-SDN Consolidated Sanctions List, which pulls in several related restricted-party lists in one place.³

The name field uses fuzzy logic, so it flags potential matches even when the spelling or transliteration differs from the official listing.³ That helps with names transliterated from non-Latin scripts, where several reasonable spellings exist. Each listing includes identifying details like dates of birth, aliases, and addresses so you can tell a sanctioned person apart from someone with a similar name.

Financial institutions, exporters, and anyone entering an international transaction should screen against the list before doing business. There is no minimum transaction size that triggers the obligation. If you transact with a blocked person or entity, you are potentially liable whether or not you knew about the designation.

The 50 Percent Rule

A company does not need to appear on the list by name to be blocked. Under OFAC’s 50 Percent Rule, any entity owned 50 percent or more in the aggregate by one or more blocked persons is automatically treated as blocked.⁴

Ownership stakes are added together. If Blocked Person X owns 25 percent of a company and Blocked Person Y owns another 25 percent, the company is blocked even though neither person holds a majority stake individually.⁴ Indirect ownership through layers of other entities counts too. The rule looks only at ownership, not control: an entity that is controlled by a blocked person but not owned 50 percent or more by one is not automatically blocked under this rule.

What To Do When You Find a Match

If a screening search returns what looks like a real match, U.S. persons must block the property or reject the transaction immediately. Blocking means freezing the assets in place. You cannot release, transfer, or allow access to them without OFAC authorization.

Reporting Blocked Property

Blocking and reject reports must be filed with OFAC within 10 business days of the date the property was blocked or the transaction was rejected, and they must include a copy of the original transfer instructions. Holders of blocked property must also file an annual report by September 30 each year.⁵ Missing these deadlines is a separate violation with its own penalties.

Handling False Positives

The fuzzy search that makes the tool effective also generates false hits. If you blocked property based on a mistaken identity or a typographical match rather than an actual sanctioned person, you can unblock it and file an unblocking report with OFAC under 31 C.F.R. § 501.603(b)(3).⁶ A separate “Compliance Release” procedure under 31 C.F.R. § 501.806 is designed for situations where there was never a blockable interest in the first place.

Be careful. Unblocking property in which a blocked person actually does have an interest, without OFAC authorization, exposes you to civil penalties.⁶ If you are not confident the match is truly false, keep the property blocked and contact OFAC.

Penalties for Sanctions Violations

OFAC enforces violations through both civil and criminal channels. Even a single transaction can be financially devastating.

Civil Penalties

The statutory maximum civil penalty under the International Emergency Economic Powers Act (IEEPA) is the greater of $250,000 or twice the value of the underlying transaction.¹ With inflation adjustments, the per-violation maximum stood at $377,700 as of January 2025.⁷ Civil liability is strict. OFAC does not need to prove you intended to violate sanctions.

Criminal Penalties

Willful violations carry criminal penalties of up to $1 million per offense and up to 20 years in prison for individuals.¹ The government must prove the person knowingly violated or attempted to violate the sanctions. Aiding or conspiring in a violation carries the same exposure.

Voluntary Self-Disclosure

If you discover a violation before OFAC does, reporting it voluntarily cuts your exposure substantially. Under OFAC’s enforcement guidelines, a non-egregious violation that is voluntarily self-disclosed carries a base penalty of half the transaction value, capped at $188,850 per violation.⁸ For egregious violations, the base penalty is halved from the applicable statutory maximum. Cooperation during the follow-up investigation can bring it down further.

A disclosure only counts as voluntary if you make it before OFAC or another agency independently discovers the problem. Disclosures containing misleading information, or notifications triggered by a third party’s separate reporting obligation, do not qualify.⁸

Getting a License for an Otherwise-Prohibited Transaction

Even when a transaction involves a blocked person or falls under a sanctions program, OFAC can authorize it through a specific license. That matters both for U.S. persons who need to complete an otherwise-prohibited transaction and for blocked persons who need access to certain funds, such as to pay legal fees related to their delisting petition.

Applications go through OFAC’s online licensing portal.⁹ OFAC reviews each request case by case. The applicant must identify every party to the proposed transaction and give OFAC enough detail to evaluate it. If a general license already covers the activity, OFAC will deny the specific license application, so check the relevant sanctions program’s general licenses first.¹⁰ Anyone with an interest in the proposed transaction can file, not only the blocked person.

Petitioning for Removal From the List

The administrative process for challenging a designation is set out in 31 C.F.R. § 501.807.¹¹ The petition can be filed by the designated person, by a designated entity, or by a person who owns a majority interest in blocked property such as a vessel.

What the Petition Must Include

You must present arguments or evidence showing either that OFAC lacked sufficient basis for the original designation, or that the circumstances justifying it no longer apply.¹¹ Most successful petitions land in the second category. Someone designated because of their role at a sanctioned entity might show they resigned and cut all ties. A company might show it restructured its ownership to remove blocked persons.

Petitions should include valid government-issued identification, detailed corporate records if an entity is involved, the date of the original designation, and a narrative of current activities. OFAC posts specific guidelines on the required fields.¹² Match every entry against the identifiers in your original listing notice so OFAC can link your petition to the correct file quickly.

Submitting the Petition

Petitions are emailed to OFAC.Reconsideration@treasury.gov.¹¹ Once filed, OFAC may request additional clarifying or corroborating information. Respond promptly, because failing to do so gives OFAC grounds to deny the petition outright. You can ask for a meeting with OFAC during the review, but the agency is not required to grant one.

There is no published timeline for a decision, and reviews routinely take many months to over a year. OFAC issues a written decision when it finishes. If the petition is granted, the petitioner’s name comes off the list in the next update, and financial institutions holding frozen assets receive notice to release the funds.

Reapplying After a Denial

A denied petition is not the end. You can reapply through the same process, but resubmitting the same arguments is pointless. OFAC will deny a repeat petition that does not present new evidence or demonstrate changed circumstances.¹² There is no formal limit on how often you can petition, but each submission needs to bring something new.

Challenging a Designation in Federal Court

If the administrative petition fails, a designated person can challenge the listing in federal district court under the Administrative Procedure Act. The court reviews OFAC’s decision under the arbitrary and capricious standard, meaning the agency’s action will be set aside if it relied on irrelevant factors, ignored an important aspect of the problem, or reached a conclusion that contradicts the evidence in the record.¹³

That is a high bar. Courts generally defer to agencies on national security matters, and OFAC often relies on classified intelligence the petitioner cannot see or directly rebut. A court can also set aside agency action that violated required procedures or exceeded statutory authority, but wins remain the exception. Exhausting the administrative petition process first is typically required before a court will hear the claim. The general statute of limitations for suing the federal government is six years from the challenged action, so a designated person who intends to litigate should not wait.

1
Office of the Law Revision Counsel. 50 USC 1705 – Penalties
2
eCFR. 31 CFR Chapter V – Office of Foreign Assets Control, Department of the Treasury
3
Office of Foreign Assets Control. Sanctions List Search Tool
4
U.S. Department of the Treasury. Entities Owned by Blocked Persons (50 Percent Rule)
5
U.S. Department of the Treasury. Filing Reports with OFAC
6
Office of Foreign Assets Control. What Should I Do If I Blocked and Reported Property in Error Due to Mistaken Identity or Typographical or Similar Errors?
7
Federal Register. Inflation Adjustment of Civil Monetary Penalties
8
eCFR. Appendix A to Part 501 – Economic Sanctions Enforcement Guidelines
9
eCFR. 31 CFR 501.801 – Licensing
10
Office of Foreign Assets Control. OFAC License Application Page
11
eCFR. 31 CFR 501.807 – Procedures Governing Delisting From the Specially Designated Nationals and Blocked Persons List
12
U.S. Department of the Treasury. Filing a Petition for Removal From an OFAC List
13
Office of the Law Revision Counsel. 5 USC 706 – Scope of Review