
What Are Blocked Asset?
Blocked assets is property, money, or frozen bank accounts, to which access is restricted due to OFAC sanctions, legal rulings, or administrative orders. Such assets remain under restriction until the reason for the blockage is resolved.
The answer to the question “what are blocked asset, ” lies in the fact that these are assets that cannot be used until the owner is removed from the SDN list or other legal obstacles are eliminated.
What happens to money, property, and bank accounts if assets are blocked?
Assets and blocked funds are effectively frozen if they are linked to involvement in or support of illegal activities such as terrorism financing, money laundering, or sanctions evasion. Frozen assets and blocked funds will remain so as long as the person or organization involved is in the OFAC sanctions SDN list. However, frozen funds are held in an interest-bearing account until the owner complies wth OFAC requirements.
Blocked assets cannot be touched or disposed of without a specific license authorization from OFAC.
To unblock frozen assets again, it is necessary to do due diligence and submit an application for frozen assets to OFAC, especially if the blocking of frozen assets occurred without due diligence or the frozen assets were by mistake. This process is complex, so it is recommended to do due diligence and consult lawyers to minimize risks, correctly name frozen assets, and prepare the frozen assets’ documents.
Can Subpoenas, Investigations, or Violations by OFAC Affect a Person’s Immigration Status?
“This depends on the circumstances of the case,” notes our lawyer. “If the investigation is related to involvement in illegal activities, providing support or financial resources to sanctioned individuals or organizations, or narcotics trafficking, it may affect a person’s immigration status. Each case requires an individual analysis of all the facts.”
Subpoenas or investigations by OFAC can seriously affect the ability to obtain a visa, green card, or citizenship. For example, violations of sanctions legislation may lead to the following consequences:
- Refusal to issue a visa. If a person is suspected of circumventing sanctions, financing prohibited activities, or managing blocked accounts, the authorities may deny entry to the USA.
- Restriction on obtaining a green card. Participation in schemes related to money laundering or supporting individuals from the SDN list makes a person ineligible for permanent residency.
- Deprivation of benefits during naturalization. In the case of active investigations or proven violations of OFAC sanctions, the naturalization process may be suspended or completely rejected.
- Risk of deportation. If a person is already residing in the USA, but their actions are related to violations of sanctions programs or managing blocked accounts, this may serve as grounds for deportation.
OFAC pays attention to entities involved in any suspicions related to sanctions evasion, financial fraud, narcotics trafficking, or support of prohibited organizations. Even indirect connections with entities involved in individuals from the SDN list can be grounds for initiating an investigation.
To protect your rights and minimize risks, especially for entities involved in the sanctions regulations and for entities involved in the case of blocked bank accounts here, it is extremely important to consult with lawyers specializing in sanctions law and immigration issues. They will help to understand how the entities involved in sanctions regulations and exactly how the case of blocked bank accounts here may affect the status of bank accounts and develop the correct defense strategy.
Mistakes that Can Lead to Receiving a Court Summons
Errors related to financial resources, sanctions regulations, and non-compliance by financial institutions with sanction laws regarding financial resources and sanction regulations can lead to serious consequences, particularly for financial institutions, including the risk of their financial resources and institutions receiving court summons.,
Let’s examine the main reasons that most often lead financial institutions to such situations:
- Non-compliance with laws, rules, and regulations.
Sanctions legislation requires strict compliance with regulations, including a prohibition on cooperation with individuals and organizations included in the SDN List (Specially Designated Nationals List). Ignoring these requirements or being unaware of the legislation may lead to the blocking of accounts or assets. For example, if a company continues to conduct business with a sanctioned organization, this may be regarded as a violation, even if it occurred by mistake. - Failure to check the SDN list when working with clients.
Companies and private individuals are obliged to check their counterparties and clients for compliance with sanction requirements. If this is not done, there is a high risk of interaction with sanctioned persons, which may lead to an investigation or the freezing of blocked assets. Banks and financial institutions closely monitor clients’ connections, and any suspicions may serve as grounds for further actions. - Unintentional connections with sanctioned parties or organizations.
In some cases, an individual or a company may establish business relationships with partners connected to a sanctioned party. Even if this was done unintentionally, the fact of cooperation may raise suspicions from authorities, including OFAC, and lead to the blocking of accounts or assets. - Suspicious activity on the bank account.
If a bank detects suspicious activity related to transfers that may be connected to sanctions violations, it is obligated to notify FinCEN (Financial Crimes Enforcement Network). At the same time, banks are not allowed to inform the client that their account is being reviewed or that information has been passed on to FINCEN. This means that a person may only learn about the review after receiving a subpoena or having their account frozen.
How to Avoid Mistakes?
- Regularly check the SDN list before concluding deals or starting cooperation.
- Ensure that your actions fully comply with sanction laws and regulations to avoid a situation with blocked assets.
- Use specialized software to check counterparties and transactions.
- In case of any doubts, consult lawyers who will help minimize the risks of being blocked or receiving a summons.
Errors related to due diligence or non-compliance with sanction rules can lead to serious legal consequences, including the blocking of bank accounts, or freezing of assets. Therefore, it is extremely important to comply with the law, do due diligence, keep bank accounts, check counterparties, and respond promptly to any suspicions. Consulting with experienced lawyers and financial institution is a reliable way to do due diligence and protect yourself from the risk of legal issues.
Steps to Resolve the Issue of Blocked Assets
Asset blocking is a complex and serious issue that requires a clear understanding of the process and prompt actions. Here are the main steps that will help you resolve this situation:
- The first step is to determine the reason for the blockage. Most often, assets, including frozen accounts, are frozen due to being listed on the SDN list, suspicions of financing illegal activities, or errors in documentation and business operations. To find out the reason, it is necessary to contact the relevant authorities, such as OFAC, and request clarification.
- Prepare the necessary documentation. If you are certain that the blockage occurred by mistake, gather documents proving your innocence. These could include agreements, contracts, bank statements, or business correspondence. A complete set of documents significantly increases the chances of successfully resolving the issue.
- Submit an appeal to OFAC. In cases where assets are blocked by mistake, submitting an appeal to OFAC is a necessary step. The appeal should include an explanation of the circumstances, evidence of your good faith, and a request for the removal of the blockage. The process may take a long time, as each case is reviewed individually.
- Seek assistance from lawyers. Asset blocking is a legally complex procedure, and the help of specialists knowledgeable in sanctions legislation is extremely important. Lawyers will help determine the reason for the blocking, prepare the necessary documents, and represent your interests before OFAC or other authorities. To prevent such situations in the future and avoid such problems, it is important to comply with sanction laws, regularly check the SDN list, and invest in counterparty verification programs.

