A sanctions case begins with designation: a person’s name appears on the SDN List, banks and counterparties start factoring in the new status, and a practical question follows — can the decision be reconsidered and the name removed from the list?
One of the most common scenarios looks like this: the designation is tied to a position, an ownership stake, or a role at a company, and after being designated the person leaves the business, sells the asset, and severs ties with the entity. The logic seems obvious — circumstances have changed, so the basis for sanctions should disappear too. Legally, though, that is not always how it works.
The first step is to establish exactly who made the designation decision. OFAC administers the SDN List, but some designation decisions are made by the State Department: specific statutes and executive orders divide authority between Treasury and State. Executive Order 14024, for example, provides for the involvement of both agencies. This, in turn, determines the procedural route for reconsideration.
A Wording That Won’t Let Go of the Past
Many designation criteria are drafted to cover not only the present but also the past. Executive Order 14024, under which most Russian designees have been listed, contains a criterion worded verbatim as: “to be or have been a leader, official, senior executive officer, or member of the board of directors” of the relevant entity.
Three words — “or have been” — change the entire logic of the case. If the person genuinely held that position, resigning does not erase the past. The formal criterion continues to describe them just as accurately as it did on the day of designation.
This is the source of the most common mistake in sanctions cases: a person spends their energy proving that things are different today, without first establishing what actually needed to be proven.
But Leaving the Company Still Matters. Just Not the Way You’d Expect
That does not mean a petition is pointless. OFAC expressly names changed circumstances as one of two grounds for delisting, and cites, as an example, precisely the situation of leaving the position held at the time the sanctions were imposed.
The difference is that what must be proven is not the fact of resignation, but a genuine change in the underlying picture. The regulator assesses the situation, not the paperwork. This usually requires a consistent, documented history — not a single order:
- exactly when the person left the position and lost the corresponding authority;
- when the person stopped signing documents and taking part in decision-making;
- what happened to ownership and control, including indirect and nominee arrangements;
- what the person did afterward and where their income came from;
- whether any relationship with the entity or related persons has continued.
In other words, a single resignation document rarely settles the matter. What is needed is an evidentiary record covering the entire period since designation.
Beware the Attempt to “Fix Everything”
There is a trap here that not everyone is aware of. OFAC specifically warns that transferring assets to other designated or blocked persons, as well as sham transactions, may be treated not as a change in circumstances but as a separate sanctions violation in its own right.
Moreover, the regulator recommends clearing in advance any sale of an interest or exit from a sanctioned entity that is designed specifically to bring about a change in circumstances. Such transactions can trigger additional sanctions and create problems for counterparties.
One Line on the List Can Hide Several Grounds
The second common mistake is to see a link to one company in the designation record and conclude that exiting that one company is enough to secure delisting.
OFAC states the requirement unambiguously: if a person is designated on multiple grounds, or under multiple criteria within a single ground, the petition must address each of them. A person may simultaneously be listed as an executive of an entity and as someone who operated in a particular sector of the economy. Proving that they left the position does not automatically dispose of the second ground.
It is precisely the additional criterion that no one noticed at first that most often turns an apparently simple case into a complicated one.
Sometimes the Argument Isn’t About Change — It’s About Error
The second line of argument OFAC offers is insufficient basis. The logic here is different: not “I changed the situation after the sanctions were imposed,” but “the facts were already different on the date of the decision.”
The regulator expressly includes here cases where a person had already left the relevant role before the sanctions were imposed, as well as situations where the company had already been liquidated by that point. Mistaken identity falls into this category as well.
The difference is fundamental. This line of argument requires evidence that existed as of the date of the decision, not evidence gathered afterward. And the choice between the two lines must be made deliberately: OFAC expects the petitioner to state explicitly which ground they are relying on.
What to Check Before Filing a New Petition
- Who made the decision — OFAC or the U.S. State Department.
- Which executive order and which specific subsection was applied.
- Whether there are several independent grounds.
- Whether the designation criterion refers to a historical fact or turns on current status.
- What the facts were as of the date of designation.
- What has actually changed since then, and what evidence supports it.
- What has already been submitted before, and whether the new petition repeats earlier arguments.
Why We Start With Diagnosis, Not Promises
A sanctions case cannot be honestly assessed from a single database entry and the client’s account of events. That is why the first stage of our work is always a thorough review of the situation.
The outcome of that review is never predetermined. Sometimes the conclusion is positive: the changes are substantial, the evidence is available, and the structure is clear. Sometimes it is conditional: certain steps need to be completed, or missing documents gathered, first. And sometimes the most useful advice is simply: don’t file yet.
That last outcome is always disappointing, but it saves both money and procedural capital. After a denial, the next attempt must bring genuinely new material. Spending that opportunity on a weak petition is an expensive mistake.
| OFAC does not assess how badly a person wants to be removed from the list — it assesses how convincingly they have demonstrated a change in precisely those circumstances that carry legal significance. |
Sources
- OFAC. How to Request Removal from an OFAC Sanctions List, sections Relevant Argumentation, Change in Circumstances, Insufficient Basis (accessed 13 August 2026).
- OFAC. Launch of OFAC Reconsideration Portal, 29 June 2026.
- OFAC FAQ 897 and FAQ 1261; U.S. Department of State. Sanctions Delisting.
- Executive Order 14024 of 15 April 2021, section 1(a) (reproduced in Appendix A to 31 C.F.R. Part 587).