OFAC and US Sanctions Lawyers in Germany

What an OFAC designation means

The Office of Foreign Assets Control (OFAC) is the US Treasury's sanctions authority. An SDN designation generally requires property in the United States or in the possession or control of US persons to be blocked. It cannot be dealt with unless an applicable exception or authorisation permits it. Blocking leaves ownership in place; it is not confiscation.

A company can also be affected without its own SDN entry. The 50 Percent Rule applies where one or more blocked persons own at least 50 percent in total, directly or indirectly. Control without the required ownership does not, by itself, meet that rule. Other grounds for sanctions must be considered separately.

A screening hit is not a designation

Similar names can cause a bank to identify the wrong person. Dates of birth, company registration details and the full list entry can help resolve the mismatch. Where there is an actual designation, the relevant list and sanctions programme determine the next steps. Some other OFAC lists carry narrower restrictions than the SDN List.

A designated person can seek administrative reconsideration under 31 CFR § 501.807. Obtaining permission for an individual payment or correcting a mistaken identity match calls for a different response.

How companies outside the US can be affected

US sanctions can apply to a German company, for example where a transaction passes through US banks or involves US persons. Some sanctions programmes impose additional rules. Being based outside the United States therefore does not exclude the application of US sanctions.

Certain transactions can also expose a company to secondary sanctions without that kind of US connection. The relevant sanctions programme determines which conduct is covered. A bank may, in turn, refuse a transaction because of its own risk policy. Its refusal does not by itself establish that the transaction is prohibited by law.

Legal remedies in the EU

An account closure or refusal to perform a contract may give rise to claims under the applicable contract law. The EU Blocking Regulation may also apply. It addresses the foreign laws listed in its Annex and measures based on them, currently certain US sanctions concerning Iran and Cuba. It does not cover all OFAC sanctions.

Removal from a US sanctions list does not automatically decide a European contract dispute. Equally, a court ruling against a bank does not remove an OFAC designation. Where proceedings run in parallel, submissions and statements need to be consistent.

How we can help

We compare the available grounds for designation with business records and ownership information. In dealings with banks, we establish whether the problem stems from a legal blocking requirement, mistaken identity or the bank's own business decision. For delisting, we prepare the evidence supporting removal. For an account closure, we examine the contract and the available court remedies.

If the matter also involves a suspected breach of German sanctions law, we provide criminal defence in foreign trade cases. An OFAC designation alone does not establish a criminal offence under German law. The list entry, correspondence from the bank and details of the affected transactions will help us assess your matter at the first consultation.