OFAC Sanctions Lawyer in Spain

How Can OFAC Sanctions Affect Clients in Spain?

A Spain-based individual or company may encounter OFAC issues even though the activity takes place outside the United States.

Examples can include transactions involving a U.S. person, payments involving a U.S. financial institution, dealings with blocked persons, certain U.S.-origin goods or services, or activities covered by sanctions programmes that impose obligations or sanctions risks on non-U.S. persons.

The precise result depends on the sanctions programme and the facts of the transaction. OFAC expressly notes that its programmes are not identical and that legal analysis must take account of the specific regulations and authorities involved.

Our OFAC lawyers assess whether a genuine U.S. nexus or other OFAC exposure exists before advising on further action.

What Is the OFAC List and What Does It Mean in Spain?

OFAC maintains several sanctions lists. The best known is the Specially Designated Nationals and Blocked Persons List, usually called the SDN List.

Where a person is subject to blocking sanctions, property and interests in property within the United States or within the possession or control of a U.S. person must generally be blocked. U.S. persons are also generally prohibited from dealing with persons on the SDN List unless an exemption or OFAC authorisation applies.

OFAC also maintains non-SDN lists that may impose restrictions other than full blocking sanctions. Therefore, identifying that a person appears on an OFAC list is only the first step. The specific programme and sanctions attached to the entry must also be reviewed.

For someone living or doing business in Spain, an OFAC listing should not automatically be treated as equivalent to an EU sanctions designation. The two systems have separate legal bases and consequences.

Can a Spanish Company Be Blocked Even If It Is Not Named on the SDN List?

Potentially, yes.

Under OFAC’s 50 Percent Rule, an entity is generally considered blocked if one or more blocked persons own, directly or indirectly and in the aggregate, 50 percent or more of that entity.

The entity does not need to appear separately on the SDN List for this rule to apply. OFAC also recommends appropriate due diligence where ownership structures may involve blocked persons.

This can be particularly important in corporate transactions, banking relationships, investments and ownership structures involving companies established in Spain.

Legal analysis should distinguish ownership from mere control. An entity is not automatically blocked under the 50 Percent Rule solely because a blocked person controls it without reaching the applicable ownership threshold, although other sanctions risks may still require review.

Can an OFAC SDN Listing Be Challenged?

Yes. A person or entity appearing on an OFAC sanctions list can request administrative reconsideration and seek removal from the list.

OFAC currently accepts delisting petitions through its Reconsideration Portal. A listed individual, company or other sanctioned property can submit the request directly or through an authorised representative.

A delisting request should address the legal and factual basis for the designation. Depending on the case, this may involve demonstrating changed circumstances, factual errors, mistaken identity, changes in ownership or control, or other information relevant to whether the designation criteria remain satisfied.

A petition should not be treated as a generic appeal. Its content should be tailored to the specific sanctions authority and the reasons for the listing.

OFAC also confirms that a person whose delisting petition has been denied may submit another request, but new arguments or evidence should be provided if a different determination is sought.

What Can You Do if Funds Are Blocked?

Blocked funds are not the same as confiscated funds.

OFAC defines blocking as freezing property so that transfers and other dealings cannot take place without applicable authorisation. Ownership does not automatically pass to the U.S. government merely because the property has been blocked.

Where funds have been blocked in connection with OFAC sanctions, the first steps usually involve determining:

• which financial institution blocked the transaction;
• which person or sanctions programme caused the block;
• whether the transaction was correctly identified;
• whether a general licence or exemption applies; and
• whether a specific OFAC licence should be requested.

OFAC states that a specific licence may be used to authorise a transaction that would otherwise be prohibited. For blocked funds, supporting documents concerning the transaction and the parties involved may be required.

When Is an OFAC Licence Required?

OFAC uses both general and specific licences.

A general licence authorises a defined category of transactions and is generally self-executing when all of its conditions are satisfied.

A specific licence is an individual authorisation issued by OFAC in response to an application concerning a particular transaction or activity.

A specific licence should not be requested automatically. The first step is to determine whether the activity is actually prohibited and whether an existing general licence or exemption already permits it.

Where no applicable general authorisation exists, an application can be prepared explaining the transaction, parties involved, relevant sanctions programme and legal basis for the requested authorisation.

Are OFAC Sanctions the Same as EU Sanctions in Spain?

No.

OFAC administers U.S. sanctions. Spain, as an EU Member State, is also subject to EU restrictive measures, which operate under a separate European legal framework.

EU sanctions are binding within EU jurisdiction, including on EU nationals, persons located in the EU and businesses operating there. Member States are responsible for implementation and enforcement.

As a result, a Spain-based client may need to consider both systems in the same matter, but the analysis must remain separate.

A person may be subject to OFAC restrictions without being subject to the same EU measures, or vice versa. The applicable prohibitions, licences, competent authorities and legal remedies can differ.

Where a matter concerns EU or other international restrictive measures rather than OFAC specifically, our international sanctions lawyers can assess the separate sanctions framework.

How Our OFAC Sanctions Lawyers Assist Clients in Spain

OFAC cases involving Spain can require both U.S. sanctions analysis and an understanding of the client’s European commercial, banking or personal circumstances.

Our work may include reviewing OFAC designations, identifying the relevant sanctions programme, assessing U.S. jurisdiction, analysing ownership under the 50 Percent Rule, preparing delisting petitions, advising on blocked transactions and preparing specific licence applications where appropriate.

We also help clients distinguish genuine OFAC restrictions from situations where a bank, counterparty or compliance provider has taken a broader risk-management decision that is not itself an OFAC designation.

If you are based in Spain and an OFAC listing, blocked payment or sanctions-related restriction is affecting your assets or business, contact our team for a confidential assessment of the available legal options.

Frequently Asked Questions

Can a Spanish bank restrict a payment even if I am not on the OFAC SDN List?

 

Yes, depending on the circumstances. A transaction may still involve blocked property if, for example, an entity is owned 50% or more by one or more blocked persons, even if that entity is not separately named on the SDN List. Financial institutions may also apply their own compliance and risk controls when reviewing sanctions exposure.

Does removal from the OFAC SDN List automatically release blocked funds?

 

Not necessarily. Delisting removes the person or entity from the relevant OFAC list, but a financial institution may still need to review the transaction, confirm the current sanctions status and determine whether any other restrictions apply. Separate EU sanctions or other legal restrictions may also need to be considered in Spain.