OFAC Sanctions Modernization: Why the Mass SDN Delistings Will Not Remove You

Between May and July 2026, OFAC took 160 individuals and entities off the Specially Designated Nationals and Blocked Persons List (SDN List). Seventy-six came off on May 28, another 84 on July 27. Not one of those removals came from a petition, and none of them was negotiated. Treasury decided the names no longer belonged on the list and deleted them.

Coverage of Treasury’s sanctions modernization initiative mostly ran with the headline count and stopped there, which skips the question that matters if you are on the list. If OFAC is deleting names from the SDN List, could yours be next?

No, at least not this way. The reason matters, because it is the difference between waiting on something that is never going to arrive and filing the petition that might actually work.

Where Treasury’s Sanctions Modernization Initiative Came From

Secretary of the Treasury Scott Bessent launched a review of the SDN List in May 2026 and talked about it publicly at the No Money For Terror conference in Paris. His argument was that designations had piled up faster than anyone was taking them back off. Treasury designated more than 3,000 names in 2024, against 880 in 2017, and the SDN List now runs past 17,000 entries. A Treasury official described the goal as keeping sanctions “efficient, sharp, and focused” and stripping out “bloat left over from previous administrations,” adding that “sanctions are not intended to be a forever tool.”

Two rounds have come out of it so far, one in May and one in July.

Treasury said the same thing about vetting both times. In round one, “OFAC conducted an interagency vetting process for each entry to ensure that removal would not harm U.S. foreign policy or national security interests.” In round two, “OFAC conducted appropriate interagency review to ensure that such removal would not harm U.S. foreign policy or national security interests.”

That sentence does more work than anything else in either release, so hold onto it.

Treasury has treated the review as ongoing rather than finished, and more rounds are expected.

Who Came Off the List, and What They Had in Common

Reported figures break the 84 removals in round two into four groups:

• 36 deceased individuals and listings associated with them
• 33 Iraq-related entities first designated in 1991 or 1992
• 7 defunct or outdated Colombia-related narcotics listings
• 8 narcotics kingpins whose networks had been disrupted

Reporting also indicates OFAC resolved 18 sets of duplicate entries, and that the 22 updated records gained missing identifiers such as date and place of birth, identification numbers, nationality, or gender.

Every one of those categories describes a designation that stopped doing any work. The person is dead, or the entity was wound up before most compliance software existed. The network was broken up a generation ago. Or the entry carries so little identifying detail that a bank running its customer file against the list would never hit on it.

None of it describes a live problem, which is the part the coverage skipped.

Will the Sanctions Modernization Initiative Remove Me From the SDN List?

No. If you are alive, your business is running, and the conduct or relationships behind your designation are still live enough for OFAC to care about, modernization will not reach you. There is also no way to apply for it. Treasury runs these rounds on its own initiative. Neither you nor your counsel can ask to be included in one.

The reason comes down to three things about how the program was built.

This is list maintenance, not a merits review

OFAC is not reopening old cases to ask whether the designations were justified. The question is narrower and more administrative: is this entry still doing any work? A record for someone who died in 2003, or an Iraqi state enterprise designated during the first Gulf War, fails that test whether or not the original designation was sound.

Your file gets evaluated on the merits only when you put it in front of OFAC and ask.

Nothing comes off without an interagency sign-off

The interagency sentence in both press releases is the tell. Each entry was individually vetted, with other agencies signing off that removal would not harm U.S. foreign policy or national security interests. That is not how a bulk purge works.

It cuts both ways. Nobody lands on the removal list by accident, and nobody lands on it if a reviewing agency would object. A designation that still touches a live policy interest gets stopped right there, at the interagency step.

Being gone is not the same as having changed

The rounds screen for people who have died and entities that no longer exist, for listings that have sat untouched for decades, for records too thin on identifying detail to run a screen against. None of that measures whether a person changed. Nothing there asks whether they cut ties, sold out of an ownership structure, or brought themselves into compliance. The criteria ask whether anything is still there at all.

A living petitioner with an operating business and an active network is about as far from a modernization candidate as you can get. That is not a comment on how strong your case is. The program simply measures something else.

What Were the Criteria for the OFAC Modernization Delistings?

Both rounds went after designations that had gone inert. Round one targeted deceased individuals, scrapped or decommissioned vessels, persons tied to illicit financial networks that no longer exist, and persons designated more than 10 years ago who lack sufficient identifiers for screening and do not appear to pose an ongoing threat. Round two targeted persons Treasury described as “no longer considered U.S. national security or foreign policy priorities,” meaning deceased individuals, defunct entities, and targets sanctioned more than 20 years ago, some of whom lack sufficient information for effective compliance screening.

Every criterion comes down to one of two things. Either the subject has stopped existing in any operational sense, or the entry has stopped working as a screening tool. Neither is a finding that a designation was wrong.

Where Modernization Does Help a Delisting Petition

Something real did change in 2026, just not the part the headlines picked up. The same initiative rebuilt how petitions get filed.

The Reconsideration Portal

On June 29, 2026, OFAC launched an online Reconsideration Portal for delisting petitions and for requests to see the information behind a designation. It replaces the old email-and-questionnaire back-and-forth with an intake system that asks for what OFAC needs upfront. OFAC has said it strongly encourages petitioners to use it and intends to move away from email submissions.

The portal also created a formal route for requesting a “courtesy document,” the unclassified, non-privileged material OFAC relied on when it listed you. For most petitioners that is the most useful thing to come out of the modernization effort. Writing a petition without knowing the actual basis for your designation means guessing at what you need to rebut.

Updated FAQ 897 and new FAQ 1261

The same day, OFAC revised FAQ 897 and published FAQ 1261. Between them they are the most detailed public account OFAC has given of how a delisting petition is handled, from intake through final determination. They also confirm that a denial is not the end of the road, and say what has to change before you refile.

What did not change

The substantive standard. A petition for administrative reconsideration still runs under 31 C.F.R. § 501.807, and OFAC still weighs whether the circumstances that produced your designation still hold. Filing got easier; the burden did not. Anyone reading the modernization rounds as a sign that the delisting standard has relaxed has it backwards.

The regulation does not put OFAC on a clock either. Section 501.807 sets no deadline for a decision, and the portal does not create one.

What Actually Gets Someone Removed From the SDN List

Everything comes back to whether the facts and circumstances that justified your designation are still true. Successful petitions generally answer that in one of three ways.

The circumstances changed. The conduct stopped, the role ended, the sanctioned government position was vacated, the entity was wound down. OFAC weighs documented change over a meaningful stretch of time, not assertions about intent.

The relationships were severed. You resigned the directorship, divested the shareholding, exited the joint venture, or unwound the ownership structure that pulled you in under the 50% rule. What carries the argument is paper. Corporate filings recording the change, the share transfer itself, a resignation letter with a date on it. Statements on their own carry nothing.

The designation rested on a factual error. Someone was confused with someone else, or transactions got attributed to the wrong party, or the evidentiary basis does not hold up once you put your own documents next to it. This is where the courtesy document matters most, since you cannot rebut a record you have never read.

Our write-up of the Zadornov delisting walks through how these arguments get built and evidenced in a real petition.

The petition path

A delisting petition is a documentary case rather than a letter. It answers OFAC’s stated basis point by point and supports every assertion with records: corporate filings, financial statements, court judgments, government certifications, sworn declarations. OFAC can then send written questions, request more documents, or ask for a meeting before it decides.

Before you file, it helps to know what the calendar really looks like. Petitions commonly run many months and sometimes years, and OFAC’s published seven-to-10-business-day figure covers intake review only, not a decision. We go through realistic timing in how long OFAC SDN removal takes.

The litigation path

Sometimes the administrative route stalls out, and sometimes it ends in a denial that cannot be reconciled with the record. Federal court is what is left. OFAC litigation typically proceeds under the Administrative Procedure Act, challenging the agency’s action as arbitrary and capricious or unsupported by the administrative record, sometimes alongside constitutional claims. Litigation is demanding and the standard of review is deferential, but a well-developed administrative record built during the petition stage is what makes it viable. What you file with OFAC shapes what a court later sees.

Frequently Asked Questions

Why was I not removed from the SDN List during the modernization rounds? Because the rounds were looking for designations that had gone inert, not for petitioners with strong cases. The names that came off belonged to people who had died and companies that no longer existed, to listings decades old, to entries carrying too little detail for a bank to screen against. An active designation attached to a living person with current relationships does not meet those criteria, and there is no way to opt in.

Can I ask OFAC to include me in a future modernization round? No. Treasury conducts these reviews on its own initiative. The only route open to a listed person is a petition for administrative reconsideration under 31 C.F.R. § 501.807, filed through OFAC’s Reconsideration Portal.

Does OFAC remove old sanctions automatically? Not automatically. Age by itself does not get anything removed, and the SDN List still carries designations going back decades. Modernization removed some older entries, but only after each one was individually vetted through interagency review and found to be inert.

Speak With an OFAC Delisting Lawyer

The 2026 modernization rounds cleared out dead records without changing anything about how OFAC treats live ones. What did change is procedural. Filing runs through the Reconsideration Portal, the guidance in FAQ 897 and FAQ 1261 is clearer than anything OFAC published before, and you can now formally request the material behind your designation. None of that moved the standard, which still asks whether the circumstances behind your listing still hold.

Sanctions Law Center is a Washington, DC firm that works on OFAC matters exclusively. We handle SDN List removal petitions, requests for the underlying record, and OFAC litigation when the administrative process runs out. If you are on the SDN List and wondering whether modernization will reach you, the more productive question is what your own petition would have to prove.

Contact us for a free case evaluation.