OFAC Litigation Attorney

OFAC Litigation: Navigating OFAC litigation

The OFAC Lawyers at Sanctions Law Center are prepared to defend our clients in federal court in litigation against the agency, including challenges to designations, enforcement actions, and civil penalties.

Can I Sue OFAC?

Yes, decisions made by the Office of Foreign Assets Control (OFAC) can be challenged in federal court. Under the Administrative Procedures Act (APA), you may seek judicial review of final agency actions, including OFAC decisions, if you have been adversely affected or aggrieved by them.

However, courts will overrule OFAC under limited circumstances. They generally defer to OFAC’s decision making and subject matter expertise due to the agency’s role in U.S. foreign policy and national security. The APA allows courts to compel OFAC to perform an action “unlawfully withheld or unreasonably delayed.” It also permits courts to strike down OFAC actions if they are:

Arbitrary or capricious, an abuse of discretion, or otherwise unlawful; In violation of a constitutional right; Beyond the agency’s statutory jurisdiction, authority, or limitations; Adopted without following required legal procedures; or Unsupported by the record in a way that makes the decision unreasonable.

When is Suing OFAC a Good Idea?

Litigation is sometimes the only way to obtain an expeditious and favorable outcome in OFAC-related cases. Suing may be strategic in cases of unreasonable delays or where OFAC’s actions contravene other laws. If you have already been placed on the SDN List and OFAC has been uncommunicative or unwilling to reconsider your designation, there is very little more the agency can do to retaliate against you for filing a lawsuit.

Suing OFAC can be helpful when a case has gone unreviewed for a long period of time. Filing a lawsuit, or even the threat of filing, can compel OFAC to act or prioritize a case that has been significantly delayed. In the context of SDN removal, litigation can also be a viable route for delisting. If you have exhausted the administrative process and remain unsuccessful, a lawsuit may be the next and final step toward delisting. Lawsuits may also be used to challenge civil penalties, particularly if OFAC improperly weighed aggravating or mitigating factors under its Enforcement Guidelines.

That said, there are limits on when litigation makes sense. Suing for damages against the U.S. government for wrongfully blocking funds seldom succeeds. Equally important is the difference in standing between U.S. and foreign persons. U.S. persons and U.S.-incorporated entities can raise constitutional arguments in court, in addition to APA claims, which gives them more avenues for judicial review. Foreign persons, by contrast, generally cannot succeed in court until they have completed OFAC’s administrative reconsideration process, and even then judicial review is highly deferential to OFAC.

Can I Win a Lawsuit Against OFAC?

Yes, but it’s rarely straightforward. Courts give federal agencies significant leeway, which makes litigation against OFAC challenging. Under the Administrative Procedure Act (APA), judges don’t re-investigate the facts of your case. Instead, they review the record OFAC had at the time it made its decision and ask whether the agency acted lawfully, reasonably, and followed proper procedures.

One additional hurdle is that OFAC can present classified evidence for “ex parte, in camera” review. This means that the judge sees the evidence privately, outside the presence of your attorneys. That makes it difficult to directly contest some of the evidence against you.

Even with these challenges, lawsuits against OFAC can succeed. In 2019, for example, ExxonMobil was fined $2 million by OFAC for entering into contracts countersigned by a Russian SDN, Igor Sechin. The court held that OFAC had not given ExxonMobil “fair notice” of its interpretation that this kind of activity would be a sanctions violation. More recently, in Van Loon v. Department of Treasury (2023), a federal court struck down OFAC’s designation of Tornado Cash, finding that the agency had exceeded its statutory authority in ruling that the “smart contracts” which were the subject of the case qualified as “property” under the International Emergency Economic Powers Act (IEEPA). That case showed that courts are willing to intervene when OFAC overreaches.

The legal environment shifted further in 2024. In Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned the long-standing doctrine of Chevron deference, a rule that once required courts to defer to agency interpretations of ambiguous laws. Now, judges must decide for themselves whether OFAC’s reading of the law is correct. This change gives challengers a stronger footing, though litigation against OFAC remains an uphill battle.

Contact an OFAC Lawyer

Litigation against OFAC requires experienced counsel. Whether you are considering challenging a designation, contesting penalties, or pushing back against agency delays, having a skilled advocate is essential. Our attorneys at Sanctions Law Center have years of experience navigating complex sanctions matters and are prepared to pursue litigation when it is in the best interest of our clients.

Our team provides businesses and individuals with the strong representation needed to succeed in OFAC-related litigation, whether it involves seeking removal from the SDN List, reducing or overturning unfair civil penalties, or compelling agency action after unreasonable delays.

If you are facing OFAC litigation challenges or need assistance with sanctions compliance issues, contact us today or call (202) 888-9011. Our experienced team is here to help you navigate the complexities of OFAC litigation and protect your organization’s interests.