Grounds for SDN List Removal: What OFAC Actually Considers

Search for the grounds for SDN List removal and you’ll find articles promising seven grounds, or ten keys, or five. The regulation that governs delisting names two. Under 31 C.F.R. § 501.807, a person on the Specially Designated Nationals and Blocked Persons List (SDN List) can argue that there was an insufficient basis for the designation, or that the circumstances behind it no longer apply. Mistaken identity, resignation, divestment, and the dissolution of a company each work only if they fit one of those two arguments.

This matters when you’re deciding whether a petition is worth filing. The Office of Foreign Assets Control (OFAC) won’t ask whether the designation is harsh or whether others in your position were left off the list. How long you’ve been listed doesn’t come into it either. What OFAC asks is whether the reason it listed you was ever true, and if it was, whether it still is.

Below, we go through both grounds and the remedial steps the regulation also lets you propose. Then we cover how death and defunct entities fit in, and which arguments don’t qualify on their own. If you already know you want to file, our SDN List removal page explains how we handle petitions.

What Are the Grounds for SDN List Removal?

There are two. You can show that there was an insufficient basis for the designation when OFAC made it, or that the circumstances that led to it no longer apply. Courts put the same test more plainly: a petitioner must show that the rationale for the designation “was never true or is no longer true.”

Both grounds come straight from section 501.807(a), which lets a sanctioned person “submit arguments or evidence” on either point. OFAC’s guidance page, How to Request Removal from an OFAC Sanctions List, sorts every petition into one of the two justifications and asks the petitioner to say which one applies. The “never true or no longer true” language comes from the D.C. Circuit’s 2015 decision in Zevallos v. Obama, and the court repeated it in 2020 when it upheld OFAC’s denial of Ayman Joumaa’s petition.

The regulation also says who can file. Any person blocked under OFAC’s regulations can petition, including specially designated nationals, terrorists, and narcotics traffickers. So can a person who owns a majority interest in blocked property, such as a vessel. A lawyer or other representative can file on your behalf with proof of authorization.

What Counts as an “Insufficient Basis” for an SDN Designation?

An insufficient-basis argument says OFAC got it wrong at the time. On the designation date, the facts OFAC relied on either weren’t true or didn’t support the sanction. OFAC’s own examples include mistaken identity, listing someone who had already left the position that triggered the designation, and listing an entity that had already been dissolved.

Because this is a fight over the record, you need to know what OFAC relied on. That’s why the courtesy document is usually the first thing to request. Through OFAC’s Reconsideration Portal, a listed person can ask for the unclassified, non-privileged exhibits behind the designation, though parts may be redacted. Without it, you’re guessing at what to rebut.

Insufficient-basis arguments usually take one of these forms:

• OFAC attributed transactions, ownership, or a role to you that belonged to someone else.
• Your resignation or share sale was complete before the designation date, and OFAC was working from an out-of-date record.
• The entity had been wound up before OFAC listed it.
• The evidence, read against your own documents, doesn’t show the conduct the designation describes.

Is Mistaken Identity a Ground for Removal?

Yes, if OFAC actually listed you. If a bank or screening tool flagged you because your name resembles a listed person’s, that isn’t a delisting matter, and FAQ 897 sends those cases to OFAC’s Compliance Hotline instead of the petition process.

What matters is whose entry it is. Say the SDN entry carries your date of birth, your passport number, or your company’s registration details, but OFAC meant to target someone else. Then the designation lacked a basis from the start, and a petition is the remedy. If the entry belongs to someone else and you just happen to share a name, you’re a false positive. You fix that by showing the bank or counterparty that you aren’t the listed person, not by asking OFAC to change its list.

What Counts as a Change in Circumstances?

A changed-circumstances argument leaves aside whether the designation was justified when OFAC made it. The claim is that something happened afterward to remove the basis for it. OFAC’s examples are resigning from a position held at the time of sanctioning, the liquidation, dissolution, or termination of a listed entity, and stopping all activity that threatens U.S. foreign policy, national security, or the economy.

This is often the more practical ground, because you don’t have to prove OFAC made a mistake. How far it gets you depends on why you were listed.

Status-based designations. Many Russia-related designations under Executive Order 14024 rest on a position, such as serving as an executive of a sanctioned bank, sitting on the board of a state-owned company, or holding government office. When the designation is tied to a role, leaving the role goes straight at the basis. Mikhail Zadornov was designated in April 2022 as chairman of Otkritie Bank. He left the chairmanship effective January 1, 2023, and petitioned OFAC that December. The petition stalled, and he was removed on April 3, 2026, after a federal lawsuit moved it forward. Our Zadornov case study covers how that played out.

Conduct-based designations. If you were listed for what you did, like moving money for a cartel or helping a sanctioned party evade sanctions, a resignation letter won’t be enough. OFAC wants evidence that the conduct stopped and the relationships behind it ended. In Joumaa’s case, the D.C. Circuit said OFAC could rely on evidence of his past illicit business relationships “absent indication those relationships had been severed.” Joumaa said he had closed his currency exchange business in 2011, but the record showed he was still running a money-laundering operation when he petitioned, and his petition failed.

Who Has the Burden of Proof?

You do. OFAC doesn’t have to prove you’re still doing what it listed you for. In Joumaa, the D.C. Circuit said the petitioner “bears the burden of showing that changed circumstances warrant withdrawing his designation.” The court also held that a petitioner’s lack of credibility is a valid reason for denial. OFAC found that Joumaa had “provided demonstrably false and misleading information,” and that finding counted against him. FAQ 897 makes the same point and warns that knowingly false statements to OFAC can carry criminal penalties.

Can You Propose Remedial Steps to Get Off the SDN List?

Yes. Section 501.807(a) lets a sanctioned person propose steps that would remove the basis for the sanction, such as a corporate reorganization or the resignation of people from positions in a blocked entity. The owner of a blocked vessel, for example, can propose selling it. The proceeds, minus the costs of the blocking and the sale, would go into a blocked interest-bearing account.

OFAC treats a proposal as a supplement to the two grounds, not a third one. Its guidance says that “proposed remedial steps are not a substitute for arguments establishing a change in circumstances.” In practice, a promise to restructure gets the discussion started. Removal comes once the change has actually happened or is locked in by binding conditions OFAC can enforce.

The best-known example is the 2019 removal of EN+ Group, UC Rusal, and JSC EuroSibEnergo. Under binding terms of removal, the companies agreed to cut Oleg Deripaska’s direct and indirect stake below 50 percent and to overhaul their boards. Since these were Russia-related delistings, Treasury had to notify Congress first and wait out a 30-day review period under the Countering America’s Adversaries Through Sanctions Act. OFAC removed the three companies on January 27, 2019. Deripaska himself stayed on the list.

Does Death Qualify as a Ground for SDN List Removal?

OFAC’s petition guidance doesn’t list death, but death fits the changed-circumstances ground, and OFAC removes deceased individuals regularly. In 2026 it removed dozens of them on its own initiative, along with defunct entities, as part of Treasury’s sanctions modernization review.

A death doesn’t settle everything, though. Three issues come up:

• The blocked property stays blocked. Assets frozen during the person’s life don’t unblock at death, and the estate can’t distribute them until OFAC removes the entry or issues a license. If heirs or associates of the original target stand to inherit, expect OFAC to look closely at who ends up with the property.
• Someone needs authority to file. OFAC’s guidance asks representatives for proof of authorization from the listed person, such as a power of attorney. It doesn’t say what happens after that person dies. An executor or estate representative will need to show both the death and their own authority, usually with a death certificate and the probate documents appointing them.
• Associates aren’t automatically released. If you were designated for acting for or on behalf of someone who has since died, the death helps your changed-circumstances argument. You’ll still have to show that your ties to the rest of the network ended.

Defunct entities work the same way. OFAC counts the dissolution of a listed entity as a change in circumstances, and a dissolution that predates the designation supports an insufficient-basis argument. Either way, you prove it with paperwork, such as dissolution filings, liquidators’ reports, or deregistration certificates.

What Doesn’t Qualify as a Ground for Removal?

Some arguments come up in nearly every first consultation, and none of them will carry a petition on its own.

• Time passing. A designation doesn’t lapse just because it’s old. The SDN List still carries entries from decades ago, and the modernization rounds removed old listings only after interagency review found them inert.
• Hardship. Frozen assets and lost banking relationships do real damage to people and their businesses, but section 501.807 doesn’t make hardship a ground for removal. It can support an OFAC license request for specific transactions while a petition is pending.
• Unequal treatment. Showing that others in your position were never designated, or were removed, can support an argument that OFAC acted inconsistently. That kind of comparison came up in the Zadornov litigation. But it doesn’t show that your own designation lacked a basis.
• Another country’s decision. A UK or EU removal doesn’t bind OFAC. We cover how the lists interact in Does Getting Off the OFAC SDN List Remove You From the UK Sanctions List?
• Promises. A pledge to stop dealing with sanctioned parties is a remedial proposal at most, unless you have evidence that you’ve already stopped.
• The same petition, again. After a denial, FAQ 1261 requires new arguments or evidence. Refile the same record and you’ll likely get a denial that just points back to the first decision.

What If You Were Designated Under More Than One Authority?

Then the petition has to meet the removal criteria under each of them, and OFAC’s guidance says so expressly. Someone listed under two executive orders, or under an executive order and a statute, can resolve the basis for one and still stay listed under the other.

Which Ground Fits Your Case?

Start with the designation date, and line up the facts you’d rely on next to it.

• If the fact came first (you had already resigned, the company was already dissolved, OFAC had the wrong person), you’re making an insufficient-basis argument.
• If it came afterward (you resigned, sold your shares, closed the business, or the person you were accused of serving died), you’re making a changed-circumstances argument.

Next, compare those facts with OFAC’s stated reasons. The press release announcing your designation gives a summary, and the courtesy document gives you the record. You need an answer for every reason. A petition that responds to the press release but ignores the evidence OFAC actually relied on tends to come back with questionnaires or a denial.

Some petitions argue both that the record was wrong when OFAC made the designation and that things have changed since. That works if each argument has its own evidence. OFAC gives documents more weight than assertions, so expect to rely on corporate registry extracts, dated resignation letters, share transfer agreements, bank records, identity documents, and sworn declarations. Our guide to how long SDN removal takes covers what happens after you file.

Frequently Asked Questions

What are the two grounds for removal from the SDN List? Insufficient basis and changed circumstances. Under 31 C.F.R. § 501.807, a petitioner can argue that there was no adequate basis for the designation when OFAC made it, or that the circumstances behind it no longer apply. Courts describe the test as showing that the rationale “was never true or is no longer true.”

Is resigning from a sanctioned company enough to get delisted? It can be, if your designation rested on that position. Resigning from a role held at the time of designation is one of OFAC’s own examples of changed circumstances. If you were designated for your own conduct, OFAC will also want evidence that the conduct and the relationships behind it have ended.

Can a deceased person be removed from the SDN List? Yes. Death is a change in circumstances, and OFAC has removed many deceased individuals, including in its 2026 modernization rounds. An estate representative seeking removal will need to show the death and their authority to act. Until OFAC removes the entry or issues a license, the blocked property stays blocked.

What if a bank flagged me because my name matches someone on the SDN List? That isn’t a delisting matter. OFAC’s FAQ 897 directs people confused with a listed person to its Compliance Hotline. A petition is for people and property actually on the list, including someone OFAC listed by mistake.

Find Out Whether You Have Grounds for SDN List Removal

Every delisting petition comes down to one of two arguments: the reason OFAC listed you was never true, or it isn’t true anymore. Remedial proposals, death, dissolution, and mistaken identity all have to fit one of those. Hardship and the passage of time fit neither, and they won’t carry a petition alone.

Sanctions Law Center is a Washington, DC firm that works only on OFAC matters. We handle SDN List removal petitions, courtesy document requests, and OFAC litigation when the administrative process stalls. Before we file anything, we check your facts against OFAC’s stated basis to work out which ground fits and what evidence you’ll need.

Contact us for a free case evaluation.