Let's review the SDN List-what it is and how to get removed from It. The Specially Designated Nationals and Blocked Persons (SDN) List is a critical tool used by the U.S. government to combat terrorism, drug trafficking, human rights abuses, and other forms of criminal activity.
While this list is not directly linked to federal criminal charges (which may or may not exist independently), having one's name on it can have immediate and severe implications for doing business in the United States.
Suppose your name or the name of your company has been placed on the SDN list. In that case, you've already likely experienced its effects, including frozen assets and an inability to conduct business.
Simply put, the SDN List is a list of individuals and entities that the U.S. government has targeted with sanctions and embargoes. The list is maintained by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
The purpose of the SDN List is to isolate and financially restrict these individuals and entities to combat threats to U.S. national security and foreign policy.
The Department of Commerce's Bureau of Industry and Security (BIS) regulates the export of commodities and related technology that, if widely released, could compromise U.S. national security.
BIS maintains a list of "denied persons," which includes foreign governments, individuals, and corporations deemed unsafe. National security responsibilities are shared among various federal agencies.
OFAC enforces regulations that target individuals and organizations representing restricted countries or involved in terrorism and narcotics trafficking. It is prohibited to engage in export transactions with entities on the SDN List.
Fortunately, the list is frequently updated, and if you can show evidence that you should not be on this list, you can petition to have your name removed.
What is the SDN List?
The SDN list is a compilation of individuals and entities that OFAC has designated as "Specially Designated Nationals," namely, those who are involved in activities that are illegal, dangerous, or against U.S. interests. This includes involvement in:
- Terrorism or support of terrorist organizations.
- Drug trafficking and organized crime.
- Proliferation of weapons of mass destruction (WMDs)
- Cybercrime and human rights abuses
Administered by the Office of Foreign Assets Control (OFAC), a division of the U.S. Department of the Treasury, this list blocks assets and limits the economic activities of individuals, entities, and even countries that pose a threat to national security, foreign policy, or economic stability.
The SDN list includes names of individuals and companies who are owned by or acting on behalf of the interests of targeted countries, as well as groups and entities like terror organizations that are not linked to any specific country.
OFAC continually updates the SDN list as new investigations are completed or new information is received. The list is published on the Treasury Department's website. It is freely accessible, making it easy for financial institutions, businesses, and governments to check whether they are dealing with a sanctioned individual or entity.
When people are added to the list of Specially Designated Nationals (SDN), their U.S. assets are blocked. Their names are also added to automated screening systems used by banks in the United States and many foreign countries, making it difficult for them to open or hold accounts, transfer money, or transact properties internationally.
Any individual or entity that provides support related to terrorism, drug trafficking, or unauthorized military use to any person or entity appearing on the SDN list risks being penalized under the USA PATRIOT Act.
What are the Ramifications of Being on the SDN List?
Being listed as an SDN can have severe consequences. Financial transactions with U.S. entities become impossible, effectively isolating you from a significant portion of the global financial system.
This can lead to substantial disruptions in both personal and business activities, including the inability to access bank accounts, enter into contracts, or engage in basic commerce.
Furthermore, the stigma of being on the SDN list can damage reputations, making it difficult to engage in global dealings or partnerships. Individuals and entities outside the U.S. often avoid doing business with SDNs due to the potential for secondary sanctions and penalties. Some of the key impacts of being on the SDN list include:
- Asset Freezing: Any assets held in U.S. financial institutions are immediately frozen, preventing access to your funds.
- Transaction Prohibition: U.S. persons, including businesses, financial institutions, and individuals, are forbidden from conducting transactions or providing services to those on the SDN list. This means you cannot open a bank account, get a loan, or engage in any legitimate business with U.S. entities.
- Severe Damage to Reputation: Being on the SDN list can severely damage both personal and business reputations. Many companies worldwide avoid dealing with SDNs to avoid penalties or sanctions from the U.S. government, even if they are not U.S.-based.
- Legal Consequences: Violating U.S. sanctions by continuing to do business with those on the SDN list can result in hefty fines and even criminal prosecution for the entities involved.
How to Get Removed from the SDN List
The process of getting removed from the SDN list, known as "delisting," is complex and requires a thorough understanding of both legal and bureaucratic procedures.
It is crucial to present compelling evidence that you are not engaged in activities that warrant your designation. This may involve demonstrating a change in behavior or circumstances or providing information that disproves the reasons for your listing.
To get your name removed from the list, you will file a formal petition to the OFAC requesting removal. Your petition should provide evidence that your inclusion on the list was a factual error, or if the inclusion was warranted, it should demonstrate that:
- You are no longer engaged in the behavior that led to the initial designation,
- Any past conduct that led to your inclusion on the list has ceased or been rectified or
- Any new information or legal arguments justify removal.
The delisting petition should include supporting documentation, such as legal arguments, affidavits, and evidence showing why your designation was improper or why circumstances have changed.
OFAC reviews the petition and decides whether to remove the name from the SDN list. Depending on the complexity of the case, this process can take several months or longer.
While you can file a petition with the OFAC on your behalf, it's highly recommended that you have experienced legal counsel help you because of the legal and personal ramifications of being on the SDN list.
A skilled attorney familiar with these federal procedures can evaluate your situation, help create your petition with compelling arguments and evidence, and coordinate the filing of the petition to improve your chances of success. For additional information, contact our federal criminal defense law firm, Eisner Gorin LLP, based in Los Angeles, California.
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