As a New York-based attorney, I provide specialized legal services on U.S. sanctions targeting Russia. These sanctions are among the most powerful tools of U.S. foreign policy and national security. Mistakes in interpretation or compliance can result in severe civil and criminal penalties, including multi-million-dollar fines. Many violations are strict-liability offenses, meaning intent is not required to establish liability. Ensuring full compliance is therefore essential for both individuals and companies.
MY PRACTICES
Sanctions Screening & Risks Due Diligence
Special Licenses & Disputing OFAC
Voluntary Disclosure Program
Sanctions &
Breach of Contract
YOU HAVE AN ACCOUNT AT A RUSSIAN BANK. START HERE.
The problem I am asked about most often in my own practice is not a shipment, a shell company, or a trade in oil. It is an ordinary bank account.
A person opened an account in Russia years ago, lawfully, when there was nothing remarkable about doing so. Then the bank was designated. Then the person moved to the United States, or became a permanent resident, or simply arrived on a student visa and stayed. The account is still there. A pension still arrives in it. A card is still linked to it. A mortgage still debits from it. Nobody has touched anything in a way that felt like a decision.
That is the fact pattern behind most of the personal exposure I see, and it is the organizing case for this page. Everything below — how sanctions work, how violations come to light, and what I do about them — is written against it.
Three things make this situation legally unstable in a way that surprises people:
Owning the money is not the issue. Dealing with it is. You are not sanctioned. The bank is. What the law reaches is your conduct in relation to property in which a blocked institution holds an interest — transfers, withdrawals, payments, the receipt of services. A dormant balance raises different questions from a card purchase, and a card purchase raises different questions from an incoming pension credit that you did not initiate.
The word "account" hides a dozen legally distinct events. A maintenance fee debited by the bank, an interest credit posted by the bank, a salary payment, an ATM withdrawal, a utility debit, an outward transfer you instructed, and a closure are not one offense repeated. They are different acts, with different actors, on different dates, under different rules. Charging them all as the same thing is the most common analytical error in this area — and clients make it against themselves, concluding that they are in far more trouble than the record actually supports.
Doing nothing has its own deadlines. Reporting duties for blocked property run on their own clocks and are not suspended while you think. Discovering the problem late does not restart them.
None of this means the answer is bad. In a large share of the matters I handle, the disciplined analysis produces a smaller problem than the client feared, a lawful route to closing the account, and a clean disclosure posture. But it has to be done in order, and it has to be done before anyone touches the account again.
HOW SANCTIONS WORK, THE TYPES THAT EXIST, AND WHAT PEOPLE GET WRONG ABOUT TAXES
1.1 FOUR FEATURES THAT MAKE THIS BODY OF LAW UNFORGIVING
Jurisdiction attaches to the person, not the payment. U.S. primary sanctions bind "U.S. persons": citizens and lawful permanent residents wherever in the world they live; entities organized under U.S. law and their foreign branches; and any individual or entity physically present in the United States. That last hook is the one that catches people. Physical presence is independently sufficient and lasts exactly as long as the presence does. A person can be outside the definition when an account is opened, inside it while studying or working here, and outside it again after departure — with different consequences attaching to conduct in each period.
An account held in Russia, denominated in rubles, operated through a Russian mobile app, with no payment ever touching the United States, is not outside the prohibitions for a U.S. person. The rules bind the person, not the payment route.
Civil liability is strict. OFAC does not need to prove that you intended to break the law. If a prohibited transaction occurred, a civil violation exists as a matter of law. A compliance program mitigates penalties; it is not a defense. Willful conduct is a separate and far more serious matter, and can be referred for criminal prosecution.
There is no de minimis threshold. No dollar figure exists below which a transaction becomes lawful. Even a small card transaction involving a fully blocked institution may be prohibited where no exemption or authorization applies. Size bears on enforcement discretion and on the penalty calculation. It does not bear on whether the prohibition was engaged.
The Fifty Percent Rule blocks entities that appear on no list. Any entity owned, directly or indirectly and in the aggregate, fifty percent or more by one or more blocked persons is itself blocked, whether or not its name is published — and the rule applies at every level of a layered structure. A clean list search is therefore necessary but never sufficient. An inability to obtain ownership evidence is an unresolved question, not a finding that no blocked owner exists.
1.2 THE FOUR TYPES OF SANCTION, AND WHY THE DIFFERENCE IS PRACTICAL
Sanctions differ in a way that matters more than their severity: they differ in how you identify what is prohibited.
Personal (targeted) sanctions — there is a list. OFAC names a person or entity on the Specially Designated Nationals and Blocked Persons List (SDN List). All property and interests in property of that person within U.S. jurisdiction or in the possession or control of a U.S. person are blocked, and covered dealings are prohibited absent an exemption or authorization. Screening against the published list is the front-line control; the Fifty Percent Rule is the complication.
Sectoral sanctions — there is a list, but it prohibits only certain activities. The Sectoral Sanctions Identifications List (SSI List) identifies persons subject to one of the Directives under Executive Order 13662. An SSI-listed institution is notblocked. It is a lawful counterparty for many purposes and a prohibited one for others — typically dealings in certain new debt or equity, subject to maturity limits, or support for specified oil projects. The list tells you who; you must still qualify what you are doing.
Regional (geographic) sanctions — there is no list; you qualify the facts yourself. Dealings connected to the Crimea region and the specified covered regions of Donetsk, Luhansk, Kherson, and Zaporizhzhia are broadly prohibited regardless of who the counterparty is. There is no roster of names. The burden is on you to establish location, delivery, and use.
Country-wide sanctions (comprehensive embargo) — the whole country is off-limits. This is the category that does not apply to the Russian Federation. Russia as a whole is not under a comprehensive U.S. embargo. What exists instead is a dense layer of targeted, sectoral, and regional restrictions, plus specific prohibitions on defined services, exports, imports, and new investment, which must be navigated transaction by transaction. Reflexive severance of all Russian contact is a business decision, not a legal requirement, and it frequently forfeits lawful activity — including, sometimes, the lawful recovery of a client's own money.
A caution that a blocking analysis gets wrong: the Central Bank of the Russian Federation, the National Wealth Fund, and the Ministry of Finance are commonly described as blocked. They are subject to Directive 4 under Executive Order 14024, which prohibits transactions involving them but does not block their property. A transaction caught by Directive 4 is rejected, not blocked — a different duty, with a different report — and the Fifty Percent Rule does not apply to Directive 4.
1.3 THE SECOND AXIS: PRIMARY AND SECONDARY REACH
Primary sanctions prohibit conduct by persons within U.S. jurisdiction. Secondary sanctions operate on persons outside it, not by outlawing their conduct but by presenting a choice: deal with the sanctioned target, or retain access to the U.S. financial system, but not both. The trigger is the "significant transaction" standard — a totality-of-circumstances assessment of size, frequency, nature, and complexity, not a dollar threshold.
For individuals, the practically important instrument is the pressure this puts on foreign banks. Executive Order 14114 exposes foreign financial institutions to correspondent-account restrictions or blocking for certain dealings connected to Russia's military-industrial base. The CAPTA List identifies foreign financial institutions subject to correspondent or payable-through account sanctions — which is less than full blocking, and produces a different analysis again. This is why a client's bank in Georgia, Armenia, Kazakhstan, Turkey, or the UAE may refuse a transfer that no U.S. rule prohibits: it is protecting its correspondent access, not applying a prohibition to you.
1.4 THE THREE TIERS OF PERMITTED CONDUCT
Not everything touching a sanctioned party is forbidden. Authorized conduct comes in three forms, and they are not interchangeable.
Statutory exemptions place certain categories outside the prohibitions entirely.
General licenses are published by OFAC and authorize defined activity automatically, with no application — but strictly on their terms, which commonly include duration limits, excluded counterparties, and exclusions for specified Directives. For an individual with an account at a bank blocked under Executive Order 14024, Russia-related General License 50 is usually the operative remedy. It authorizes what is ordinarily incident and necessary to closing such an account and transferring the assets to the holder — and nothing beyond that. Section 4 sets out what it does not authorize, which is where most of the difficulty lies.
Specific licenses are issued case by case, to a named applicant, on the facts disclosed in the application. They are individual and prospective. No license authorizes a transaction effected before its issuance unless it says so expressly.
One further point that is constantly assumed away: a general license permits a transaction. It does not oblige any bank to process one, and U.S. authorization is not a guarantee that funds can actually leave Russia, where currency controls and local restrictions operate independently.
1.5 APPLIED TO YOUR ACCOUNT: WHICH MEASURE ACTUALLY HIT YOUR BANK?
"My bank is sanctioned" is not an answer, and cannot be analyzed in that form. A Russian financial institution may be:
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a fully blocked SDN;
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an institution subject only to correspondent-account restrictions;
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an institution subject to one of the sectoral Directives;
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an institution blocked by operation of the Fifty Percent Rule without ever appearing on a list; or
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none of these.
The prohibitions, the reporting duties, and the available licenses differ in every case. So does the answer for you — which also turns on when you became a U.S. person and what actually happened, and when.
Where the institution is fully blocked under Executive Order 14024, OFAC has said what it expects, and it is worth reading in the agency's own words rather than mine. FAQ 1080 addresses precisely this situation: accounts held by U.S. persons at blocked Russian financial institutions are generally themselves blocked property unless exempt — checking and savings accounts, credit cards, certificates of deposit, loans, and mortgages alike. The holder must stop using the account and treat it as blocked even where the Russian bank continues to operate it normally. And a blocking report is due to OFAC within ten business days of the blocking.
That last point is the one clients meet too late. The bank in Russia will keep posting interest, keep debiting fees, and keep letting the card work. None of that is a signal about your position under U.S. law, and the reporting clock does not wait until you discover it.
And dated evidence matters more than a current screen. A search run today establishes today's position. It does not establish the institution's status on the date of a transaction three years ago, and the analysis of historical conduct turns entirely on historical status. A present-day listing cannot show that a bank was blocked earlier; a later delisting does not retroactively authorize what was done while the designation stood.
1.6 WHAT PEOPLE GET WRONG ABOUT U.S. TAXES AND SANCTIONED ACCOUNTS
The foreign-account disclosure obligations rest on authorities entirely separate from the sanctions laws, and the interaction between the two is where clients do themselves the most damage — usually by reasoning their way into silence. These are the misconceptions I correct most often.
"If the bank is sanctioned, the account doesn't have to be reported." It does. The FBAR (FinCEN Form 114) is required under the Bank Secrecy Act of every U.S. person with a financial interest in, or signature authority over, foreign financial accounts exceeding $10,000 in the aggregate at any point in the year. The threshold is measured by the highest balance, not the year-end balance, and it is indifferent to whether the account produced income, whether any tax was owed, and whether the institution is designated. Form 8938, and in some structures Forms 5471, 8858, 8992, and 8993, may apply independently.
"Reporting the account is confessing to a sanctions violation." This is the misconception that does the most harm, and it rests on a real but misidentified conflict. Reporting is the communication of facts to the United States Government. It is not a transaction with a blocked institution. What the sanctions laws prohibit is dealing — transferring, withdrawing, paying, receiving services. It is therefore ordinarily possible to satisfy the disclosure obligations in full while taking no prohibited action at all: the account is reported, and the funds are left untouched.
The genuine conflict lies not in the disclosure but in conduct someone might undertake to facilitate it — contacting the bank for a year-end statement, paying it a fee for records, or moving funds to meet a tax liability. Those three are not equivalent and must not be analyzed as though they were.
"The money is frozen and I can't reach it, so it isn't really mine." Inaccessibility does not remove a reportable financial interest, and it does not remove the duty to report blocked property to OFAC. Dormancy removes nothing.
"I'm on an F-1, my days don't count, so I'm not a U.S. person." The exclusion of days for federal tax-residence purposes has no bearing on the sanctions definition. Physical presence in the United States supplies U.S.-person status for sanctions purposes regardless of how the day-count rules treat you. This single confusion accounts for a remarkable share of inadvertent exposure among students and recent arrivals.
"I'll pay my U.S. tax out of the frozen account." Blocked funds may not be applied to a tax liability, to living expenses, or to any other creditor without authorization, and a setoff against blocked property is itself a prohibited transfer.
"I'll leave the line blank and rely on the Fifth Amendment." There is no blanket permission to omit the account, and the filing technique people have heard about — report the figure, write "Fifth Amendment" in place of the source — is not what the leading cases hold. A blanket refusal to file is not a privileged assertion. A false entry is not a privileged assertion; it is a false statement. Whether any particular compelled disclosure is privileged requires item-specific analysis, and the required-records doctrine is a serious obstacle in this setting. This is advice that has to be given on your actual facts, in a specific procedural posture — never as a formula.
"A voluntary disclosure to one agency covers the others." It does not. The frameworks have different eligibility rules, different timing tests, and different consequences, and the sequencing between them is itself a decision. Section 5 explains what that means in practice.
"Non-filing is a small civil problem." A non-willful FBAR failure is civil, applied per annual report, with a reasonable-cause defense available. A willful failure is a different order of exposure: a civil penalty reaching the greater of roughly $100,000, as adjusted, or 50% of the account balance, assessable per year — so that the cumulative penalty can exceed the account itself — and criminal liability under 31 U.S.C. § 5322. A knowingly false answer to the Schedule B foreign-account question carries independent exposure under 18 U.S.C. § 1001 and 26 U.S.C. § 7206.
And here is the part that should be stated plainly: a taxpayer who omits the account precisely because the bank is sanctioned has, by that conscious choice, supplied much of the evidence of willfulness the government would need. Awareness of the designation is not a mitigating fact in that posture. It is the aggravating one.
"I paid tax on this money, so the account is clean." Tax compliance answers the tax question. It says nothing about whether a dealing with a blocked institution was authorized. The two regimes are separate, and satisfying one has never discharged the other.
The correct posture, stated once: disclose completely and accurately on every applicable return, because reporting is not a prohibited dealing; suspend every act touching the blocked funds until it is separately authorized; and where past filings were incomplete, choose the corrective route deliberately rather than filing with both agencies by reflex. The dilemma is real, but it is a dilemma about how to comply, not about whether to.
EXPOSURE
HOW THESE VIOLATIONS ACTUALLY COME TO LIGHT
Clients tend to assume that the risk is an OFAC investigator deciding to look at them. In my experience that is rarely how these matters begin. Personal sanctions exposure more often surfaces through channels that are already running, for reasons that have nothing to do with you — and several of them foreclose options before you know the matter exists.
2.1 OFAC'S OWN INVESTIGATION
OFAC has administrative authority to demand records and information, and its enforcement work begins from data it already holds — including the mandatory blocking and rejection reports described below, referrals from other agencies, and information developed in related matters. An inquiry that begins as a request for records is not a neutral event: the response shapes everything that follows, including the penalty calculation.
2.2 THE BANK'S MANDATORY REPORT — AND WHY IT DECIDES YOUR OPTIONS BEFORE YOU ACT
This is the most consequential channel, and the least understood.
When a U.S. financial institution holds property in which a blocked person has an interest, it must block that property and report it. When a transaction is rejected because a prohibition applies, that too must be reported, generally within ten business days. These are obligations of the institution, made independently of you and usually without telling you.
The consequence is severe and cannot be outrun: a notification to OFAC does not qualify as a voluntary self-disclosure where a third party was required to, and did, report the apparent violation or a substantially similar one because it blocked or rejected the transaction — regardless of when OFAC received that report, and regardless of whether you knew it had been made. If your transfer was stopped by a correspondent bank six months ago, racing to file now does not create eligibility.
This is why the very first question I ask in an account matter is not "what did you do" but "what have the processing institutions already reported."
2.3 BANK KYC, AML, AND ENHANCED DUE DILIGENCE REVIEWS
For individuals, this is the most common trigger of all — and it almost never announces itself as a sanctions inquiry.
It begins as a customer-information update, a request to substantiate the source of wealth behind a deposit, a demand for foreign tax returns, or a threatened account closure. U.S. banks must maintain risk-based customer due diligence, and supervisory guidance identifies source of funds and wealth, business financials, customers and suppliers as information relevant to higher-risk relationships. The same guidance recognizes that customer due diligence information may identify sanctioned parties.
So a review that started with a wire from a Turkish account can extend into statements from 2018 bearing the name of a bank that was designated in 2022. A bank may combine payment records and screening results with incorporation records, earlier applications, answers given by telephone, tax documents, and public business information — and separate pieces of a customer's history can be assembled and compared long after the account was opened.
Two features of this channel are invisible to the customer and routinely misread.
You cannot learn whether a suspicious activity report was filed. Anti-money-laundering rules operate alongside sanctions screening and may require a bank to file a suspicious activity report. The existence or non-existence of such a report is confidential by law, and the institution generally cannot tell you either way. Silence from your bank therefore means nothing — it is not clearance, and it is not evidence that something was filed, and asking will not resolve the question. The correct response is to analyze your actual position rather than to read the bank's behavior for signals.
Banks may share information with each other. Section 314(b) of the USA PATRIOT Act provides a safe harbour under which participating financial institutions may share information with one another. Participation is voluntary, requires notice to FinCEN, and the protection extends only to sharing for the purposes the rule identifies. It is therefore not a general channel through which every customer's history travels between banks. But it exists, other lawful channels exist alongside it, and the practical consequence is worth stating plainly: moving to a different institution should not be assumed to leave a history behind.
Two corrections that save clients real money here. First, a request is not evidence that you violated anything. An old statement bearing the name of an institution that is now an SDN establishes nothing by itself: the entity, the designation authority and its effective date, the date and character of each dealing, your status and location at the time, and any applicable authorization all have to be established. A completed lawful transfer before designation does not become unlawful because the bank was designated later. Second, receipt by an unlisted bank is neither clearance nor contamination. A recent transfer through a clean intermediary does not extinguish a legally relevant earlier blocked-property interest, and it does not attach a permanent label to everything that once passed through Russia.
What does cause damage at this stage is an improvised response: a narrative assembled to satisfy the reviewer, inconsistent with an answer given three years earlier, or supported by a statement obtained by logging into the sanctioned bank and generating a fresh transaction in order to document old ones — which creates a new violation in the act of documenting the old one.
2.4 REFERRALS AND DATA FROM OTHER AUTHORITIES
The Internal Revenue Service, FinCEN, the Bureau of Industry and Security, Customs and Border Protection, and the Department of Justice all generate information that can reach OFAC. Suspicious activity reports, FATCA reporting by foreign institutions, intergovernmental information exchange, and ordinary examination activity all operate on their own schedules and for their own reasons.
Immigration proceedings deserve separate mention. Naturalization and adjustment applications, and the sworn statements that accompany them, create a durable record of what a person said about foreign assets and income, and when. Where that record does not match a later disclosure, the inconsistency is itself the problem. For a noncitizen, the immigration consequences of both disclosure and silence must be analyzed before any substantive submission is made — never afterward.
2.5 REPORTS BY PRIVATE INDIVIDUALS — NOW WITH A FINANCIAL INCENTIVE
OFAC accepts reports from the public, and a meaningful proportion of individual matters begin with someone who has a reason to make one: a former spouse, a former business partner, a departing employee, a relative in a property dispute, a competitor.
This channel changed materially in 2026. Under 31 U.S.C. § 5323, FinCEN administers a whistleblower program covering violations of the Bank Secrecy Act, IEEPA, the Trading With the Enemy Act, and the Kingpin Act — which includes the sanctions programs OFAC administers. Eligible individuals whose original information leads to a successful Treasury or DOJ enforcement action resulting in monetary penalties exceeding $1,000,000 may receive 10 to 30 percent of the amounts collected, and FinCEN published a proposed rule on April 1, 2026 to operationalize the program in detail. Bank employees, former employees, compliance staff, customers, and counterparties are all potentially eligible.
The practical implication is not that every dispute becomes a tip. It is that the economics of reporting have changed, and that people with access to your financial history now have a quantified reason to use it.
2.6 JOURNALISTS, RESEARCHERS, AND LEAKED DATASETS
Investigative outlets and research organizations publish structured datasets drawn from corporate registries, leaked records, procurement data, and vessel tracking, and those datasets are searchable by anyone — including counterparties, banks, and government agencies. A name that appears in such a dataset does not establish a violation, but it reliably produces questions from institutions that see it, and it can convert a dormant matter into an active one overnight.
2.7 EXTORTION AND FRAUD AIMED AT PEOPLE WITH RUSSIAN FINANCIAL HISTORY
This is the channel clients are least prepared for, and it is worth describing plainly.
Markets in leaked or insider-sourced Russian banking data have been widely reported for years. A predictable consequence is a category of approach in which someone contacts an individual abroad, presents what appears to be genuine detail about their accounts or transfers, and demands payment in exchange for not reporting them to OFAC, the IRS, or their U.S. bank. The approach may come by messenger, by email, or through a person presenting themselves as a compliance consultant, a "sanctions specialist," or a former official who can make the problem disappear.
The response is the same regardless of whether the underlying data is real:
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Do not pay, and do not negotiate. Payment resolves nothing. It does not cure any violation that exists, it does not bind the person you paid, and it frequently produces further demands.
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Do not respond substantively, and do not confirm or deny facts. Anything you say is now a document in somebody else's file.
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Preserve everything — the messages, the metadata, the account identifiers used, the payment instructions given.
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Separate the two problems. The extortion is one matter; whether you actually have a sanctions or reporting exposure is an entirely different one, and it is answered by the legal analysis, not by the accuracy of the threat. The paradox worth naming: if the underlying exposure is real, the disciplined response — proper reporting, a licensed closure, a considered disclosure decision — is also what removes the leverage.
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Take advice before contacting law enforcement, so that what you provide is accurate and does not create new problems in the tax or immigration record. If anyone is in immediate danger, that is not a legal question — contact emergency services first.
Be equally careful with the legitimate-sounding version of the same thing. A person who offers to "clear" your name with OFAC, guarantee a delisting, or arrange a license through a contact is not describing a process that exists.
2.8 PRESSURE ON PEOPLE WHO HAVE LEFT RUSSIA
Clients who have emigrated — particularly those with a public profile, a professional history in a sensitive sector, or family remaining in Russia — report being approached by people claiming to act for Russian authorities, and being pressured through relatives who remain. Requests are sometimes framed as routine: sign a document, transfer an asset, give a power of attorney, provide information about your affairs abroad, or "just move the money home."
Two points matter legally, and they are easy to lose under pressure. First, a demand or communication from a Russian authority does not change your position under U.S. law, and complying with it can create a U.S. violation where none existed. Moving funds, granting authority over assets, or restructuring ownership in response to such a request is a dealing that has to be analyzed on its own terms. Second, a document signed abroad under pressure does not become invisible; it will appear later, in a KYC file or an immigration record, and the time to characterize it accurately is now.
If your safety or your family's safety is implicated, that concern comes first and should be raised directly. It does not change the analysis, but it changes the sequence in which things are done.
2.9 WHAT THESE CHANNELS HAVE IN COMMON
In almost every one of them, the decisive material is a record that already exists and that you have already created: bank statements, prior answers to a compliance questionnaire, tax filings, immigration forms, messages with the bank. The contemporaneous record is what will establish that an earlier transaction was innocent, if it was.
Which leads to the instruction I give before any other: do not touch the record. Do not delete messages. Do not amend transaction descriptions. Do not backdate instructions. Altering the record converts a reporting problem into an obstruction problem and forfeits the only defense that was actually available.
If a bank, an agency, a counterparty, or an unknown person has raised this with you, ask for a privileged exposure assessment before you respond on the merits.
MY SOLUTIONS
MY SERVICES: SANCTIONS SCREENING AND RISK DUE DILIGENCE
Screening is where an account matter is won or lost, because every later decision — whether to close, whether to disclose, what to tell a bank — depends on findings that have to be established rather than assumed. My work in this phase is designed to produce a record that can be handed to OFAC, to a bank's compliance team, or to a court, and survive it.
Identify the counterparty, the authority, and the dates. I establish the exact legal entity holding the account rather than its trading name, any parent or beneficial owner, the designation authority under which each restriction was imposed, and the effective date of each. A single institution may carry several measures at once, and they do not arrive together. I preserve dated list evidence — archived entries, the Federal Register notice or press release, the effective date stated in the instrument — rather than a screenshot of today's result.
Trace ownership and apply the Fifty Percent Rule. Where an institution or counterparty is not itself listed, the ownership question is worked through at each level rather than assumed away, and gaps are recorded as gaps.
Build the jurisdictional chronology. Citizenship and immigration status over time, entries to and departures from the United States, the place from which each instruction was given, and residence at each point — drawn from travel records, immigration documents, and application or device login data. This chronology, laid alongside the transaction record, is what determines which transactions are within the prohibitions at all. It is frequently the document that shrinks the matter.
Reconstruct what actually happened, item by item. For each entry: the date and time zone; who initiated it; the instruction given, if any; the counterparties and every intermediary institution; purpose and value; your location and status on that date; the institution's status on that date; and any license then in force. Bank-generated entries are distinguished from client-instructed ones. What is known is separated from what is reconstructed and from what remains unknown, and evidence still to be obtained is obtained lawfully — which specifically excludes logging in and transacting in order to retrieve a statement.
Sort exposure against the limitations boundary. Conduct whose latest date fell before April 24, 2019 is ordinarily outside the civil period; later conduct carries a ten-year exposure. That boundary prioritizes analysis. It is not a document-destruction date, and tax, FBAR, and criminal allegations require their own limitations analysis.
Produce a disposition schedule. A client with a dormant ruble account, a brokerage account, recurring utility debits, and a pension paid through the same bank does not have one problem. One global instruction to "close everything" is not a legal analysis. The schedule identifies which assets may lawfully be held where they are, which payments can continue only under a particular authorization, which standing instructions must stop, and which assets require a specific-license request — together with a written list of permitted next steps specific enough to follow.
For institutional and fund clients, the same discipline applies at scale: investor, subscriber, and limited-partner screening at onboarding and on an ongoing basis; portfolio and downstream-holding diligence so that a new designation does not quietly convert a compliant asset into blocked property; screening embedded into subscription, capital-call, and distribution workflows; and ongoing monitoring against list changes and new determinations, with audit-ready records.
MY SERVICES: SPECIFIC LICENSES AND DISPUTING OFAC DECISIONS
LICENSED CLOSURE OF AN ACCOUNT AT A DESIGNATED BANK
For most individual clients this is the operative remedy, and it is a drafting and diligence exercise rather than a form submission. Before any instruction is sent, I assemble a closure file that confirms you are not a blocked person; identifies the account, the institution, and the authorities applicable to it; confirms that the intended act is a genuine closure and transfer of all assets rather than routine partial withdrawals; maps and screens the receiving institution and every intermediary in the payment path; records the version of the license relied upon; and settles the reporting position on the unblocking itself against the regulation and the license text in force on the date of transfer.
That last item is not a formality. The reporting rules for unblocking have been amended, and published guidance is not always reissued in step with the regulation it describes. The position has to be settled by reading the regulation and the operative license text together as of the date of the transfer, on the facts of the particular closure — not assumed from a summary, including mine. I do that analysis on every closure and record the basis for it in the file.
I then address execution as a separate problem. U.S. authorization is one necessary component of a lawful exit, not a guarantee that funds can leave Russia. Local restrictions, currency controls, and institutional capacity operate independently, and their applicability can turn on citizenship, residence, currency, and asset type. I coordinate with Russian counsel where local permissions may be required, confirm that the sending, receiving, and correspondent banks will actually implement the proposed route, and build in a defined point at which processing stops if an intermediary, asset type, ownership fact, or license changes.
Where the proposed route, the asset type, or the account structure falls outside a general license, the answer is a specific-license application — not an approximation. Securities and custody chains are the usual example: an apparently unblocked issuer does not make its securities freely transferable if a blocked broker, custodian, depository, nominee, or registrar holds a property interest somewhere in the chain.
SPECIFIC LICENSE APPLICATIONS
Where no general license fits, I prepare and file specific-license applications through OFAC's licensing portal. The agency expects enough information for a meaningful national-security review: a complete description of the transaction and its purpose; the identity of every counterparty and beneficial owner; the proposed payment routing, including each processing institution and the currency; end use and end user; the applicant's relationship to any blocked person; compliance history; and the legal authority relied upon. Most applications take months; complex matters can take a year or more and may be conditioned on compliance undertakings.
Categories in which I work regularly include releases of limited blocked funds for legal fees and basic living expenses; wind-down and orderly closure where no general license adequately covers the facts; divestment to non-blocked acquirers; satisfaction of judgments and arbitral awards against blocked property; insurance and reinsurance claims under pre-existing policies; regulatory, bankruptcy, and tribunal proceedings; and humanitarian or academic activity outside the scope of an available general license.
Two structural points govern every application. A license authorizes only what it states, and no license authorizes a transaction effected before its issuance unless it expressly says so — retroactive effect must be sought expressly and must appear in the instrument. And a pending application permits nothing: nothing may be executed while it is under consideration.
DISPUTING OFAC DECISIONS
Delisting petitions. A person designated on the SDN, SSI, CAPTA, or NS-MBS lists may petition for removal under 31 C.F.R. § 501.807. A petition may proceed on factual error in the basis for designation; on changed circumstances since designation — most commonly divestment, sale, or a genuine change of ownership and control; or on verifiable compliance commitments sufficient to satisfy OFAC that the conduct will not recur. OFAC may issue interrogatories, require production, and negotiate undertakings. The burden of persuasion rests on the petitioner, timelines run from months to years, and delisting is uncommon but real. In June 2026 OFAC launched an online reconsideration portal with revised submission guidance; I confirm the accepted filing method at the time of each filing.
Mistaken identity. A false name match is a different problem with a different solution: identity evidence and the release procedure under 31 C.F.R. § 501.806, not a license to transact with the actual designee. Clients routinely conflate the two and pursue the wrong remedy for months.
Unreasonable delay. There is no regulatory deadline for resolving either a delisting petition or a license application, and delays of a year or more without substantive communication are common. Where delay becomes unreasonable, relief may be sought under 5 U.S.C. § 706(1), which authorizes a court to compel agency action unlawfully withheld or unreasonably delayed.
Judicial review. Designations are reviewable under the Administrative Procedure Act, principally in the District Court for the District of Columbia, under a deferential arbitrary-and-capricious standard on the administrative record, with limited petitioner access to classified portions of that record.
Bank refusals are not OFAC decisions. A bank's decision to process a payment is not an OFAC opinion, and its refusal does not establish that OFAC prohibits the transaction — risk appetite, foreign law, correspondent access, or documentation policy may explain it. Establishing the actual basis of a refusal, and distinguishing legal prohibition from commercial decision, determines whether the answer is a petition to OFAC, a commercial negotiation, or a contract claim.
MY SERVICES: VOLUNTARY DISCLOSURE
Voluntary self-disclosure is the single most consequential discretionary decision a person facing an apparent violation will make, and it is routinely described in terms that are close enough to be dangerous.
What it is not. It is not amnesty; OFAC operates no amnesty program. It does not authorize the conduct to continue. It does not bind the Department of Justice, the IRS, FinCEN, or the Bureau of Industry and Security. And it is not a discount applied to a penalty OFAC would otherwise have demanded.
What it actually does. It changes the base amount from which the civil penalty calculation begins, and it weighs in the exercise of enforcement discretion — including the discretion to close a matter with no action or a cautionary letter. The structure matters more than any single figure. In a non-egregious case that is voluntarily disclosed, the base amount is one-half of the transaction value, subject to a per-violation cap. In a non-egregious case that reaches OFAC by other means, the base is the applicable schedule amount, subject to a cap twice as high. In an egregious case, the base is one-half of the applicable statutory maximum if disclosed, and the full statutory maximum if not. The benefit is structural rather than a discount on whatever OFAC would otherwise have demanded, and the aggravating and mitigating factors continue to operate on the base amount once it is set. The caps and the statutory maximum are adjusted for inflation; current figures appear in the FAQ below, with the date on which they were checked.
Qualification, and the trap that decides most cases. A voluntary self-disclosure is self-initiated notification made before or at the same time OFAC or any other government agency discovers the apparent violation or a substantially similar one. Simultaneous notification qualifies — the test is not "before anyone knows." But the comparison is to a substantially similar apparent violation, so a disclosure can fail because the agency already knows of a related course of conduct.
A disqualifier that frequently controls is the third-party reporting rule set out in section 2.2 above. Establishing early and specifically what the processing institutions actually reported is therefore not background research. It is the threshold question, and I do it first.
The remaining disqualifiers matter too: a disclosure containing false or misleading information, one that is materially incomplete when read with any supplement, one that is not self-initiated — including one that follows a suggestion from a government agency — and one made on an entity's behalf by a person without authority. A license application is not a disclosure and does not become one.
How I handle the mechanics. Disclosure is a two-stage process. An initial notification can be made on the basis of enough reliable information to avoid being materially misleading, with a detailed report following the completion of the investigation; OFAC generally expects that report within 180 days of notification, though that is an expectation rather than an entitlement, and it does not postpone the initial notification or override a case-specific deadline. I build the investigation and mitigation record in parallel: what failed, what has stopped, what now prevents recurrence. For an individual who held a personal account at a bank later designated, this is a credible account of remediation — standing instructions stopped, a documented closure route pursued, screening established for future dealings, lawful tax reporting coordinated rather than deferred — not a multinational's compliance apparatus, which would not be credible.
Mandatory reports are not disclosure and are not optional. The duties to report blocked property and rejected transactions run independently of any decision about disclosure — and, as FAQ 1080 states directly for the account holder at a blocked Russian bank, the initial blocking report is due within ten business days. They are not satisfied by a disclosure, they are not suspended while counsel considers one, and a late report is its own problem — to be analyzed on its own terms, with its date never misstated.
Where a disclosure does not qualify, cooperation and remediation retain real value and should be presented as what they are, rather than dressed as something they are not.
Coordination is the part that is usually mishandled. A submission to OFAC addresses OFAC's civil enforcement and nothing else. It does not resolve tax exposure, which is governed by the IRS's own eligibility rules and its own practice — and the criminal voluntary-disclosure route there is not the ordinary answer to every reporting error. It creates no agreement with the Department of Justice. Where credible criminal exposure exists, any substantive submission must be shaped by criminal counsel before it is made, because a disclosure can contain consequential factual admissions. For noncitizens, the immigration analysis is coordinated before submission, not after. Which disclosure, to which agency, in what order, and on what facts is a decision made on the particular record — never by default.
MY SERVICES: SPECIFIC LICENSES AND DISPUTING OFAC DECISIONS
THE PROPOSITION THAT SURPRISES PEOPLE
A party can be simultaneously compliant with public law and liable under private law. Clearance under the sanctions regulations answers the regulatory question — was this act permitted, or required? — and nothing more. It says nothing about whether the same act breached a guarantee, a letter of credit, a correspondent banking agreement, a supply contract, or an account agreement governed by a different legal system. OFAC is institutionally indifferent to the second question: the prohibitions apply notwithstanding any contract predating their effective date. The regulatory regime creates the occasion for breach, and a firm can pay twice for one decision — once in forgone business, and once in damages or a judgment entered abroad.
There is a statutory answer, and it is narrower than people assume. Under 50 U.S.C. § 1702(a)(3), compliance with a regulation, instruction, or direction issued under IEEPA is, to the extent of that compliance, a full acquittance and discharge of the obligation, and no person is liable for anything done or omitted in good faith in connection with or in reliance on IEEPA. Three limits account for most of the litigation. It protects what was done in good faith in reliance on the regulations — a refusal driven by an institution's own risk appetite rather than an applicable prohibition is not obviously that. It runs to the extent of the compliance and no further, so it does not reach the manner of termination, the adequacy of notice, or a representation made before the block. And it is a rule of United States law: a foreign court applying its own mandatory provisions is under no obligation to give it effect — and that is precisely where the asset seizures have occurred.
WHERE I ACT
For account holders and individuals. The account-level version of this problem is concrete: a bank freezes or closes an account and refuses to explain the basis; a correspondent stops a transfer and neither end will say why; a receiving institution accepts a licensed closure route and then declines to process it; a brokerage refuses to release securities that no prohibition reaches. I establish the actual basis of each action, distinguish legal prohibition from commercial overcompliance, and pursue the remedy that matches — a corrected screening record and a § 501.806 release where the issue is a false match, an authorization where a genuine blocked interest exists, and a contractual or regulatory complaint where a bank's own policy, not the law, is the obstacle.
For commercial parties. Where a party invokes sanctions to justify non-performance, U.S. contract law offers impossibility and impracticability, frustration of purpose, and illegality — none designed for this purpose, and all sharing the same weak point: foreseeability. Courts routinely deny these defenses where the risk was foreseeable at contracting, and after 2014, and unmistakably after February 2022, sanctions risk in a Russia-linked transaction is not unforeseeable in the way a natural disaster is. Contract vintage is therefore a substantive variable, not a filing detail, and an existing book of guarantees, letters of credit, or long-term supply agreements should be sorted along that timeline rather than by counterparty alone. I do that sorting, assess each excuse route against the governing law and the clause actually drafted, and advise on force majeure provisions, which do not operate identically across instruments and do not automatically extend to an autonomous obligation.
On overcompliance. Refusing performance where no prohibition applies is its own exposure, and it is a recurring problem in my practice. Good faith and the limits of contractual discretion are live questions where an institution exits a relationship on risk grounds and calls it compliance.
On conflicts of law. Blocking statutes and counter-sanctions regimes mean that compliance with U.S. law can itself be actionable elsewhere, and that a judgment obtained in one forum may be enforced against assets in another. Forum, governing law, and the practical location of assets have to be analyzed together rather than clause by clause.
On drafting. The corollary to every point above is that sanctions risk should be allocated expressly rather than left to a doctrine that weakens with every month the program stays in the news: non-blocked status representations extending to beneficial owners; covenants on onward dealings; sanctions-event termination rights; express authority to decline performance that would breach U.S., U.K., or EU measures; and indemnities allocating residual loss. I draft, review, and renegotiate these clauses, and I do it with the enforcement and excuse case law in view rather than from a precedent bank.
Beyond contract. The same facts can generate tort claims, governance and fiduciary exposure, insurance coverage disputes under sanctions-limitation clauses, and financing consequences under representations and covenants. These are assessed together, because a decision that resolves the contract question can create the governance one.
DO NOT CREATE A NEW TRANSACTION WHILE INVESTIGATING AN OLD ONE
Before you do anything else. Preserve what you already have, for the reasons given in section 2.9. Then, before you initiate a transaction on the account, pay the bank, request a new service or statement from it, move or restructure funds, or give a substantive explanation to a bank, an agency, or anyone else, obtain advice. The steps people take on their own initiative to resolve this — a withdrawal, a test payment, a transfer through a relative or a third country, a conversion into cryptocurrency, a change of ownership on paper — do not authorize what remains prohibited and can create exposure that did not previously exist.
If you are already facing a deadline from a bank or an agency, say so at the outset. A document deadline is not the same as an OFAC reporting deadline or a statutory filing obligation, extensions can often be requested, and none of them pause while a decision is made. The sequencing is part of the advice, not a reason to delay seeking it.
What to tell me first. The name of the institution exactly as it appears on your statements; whether you have used the account since entering the United States or becoming a permanent resident; the rough dates involved; and whether any bank, agency, or other person has already raised the issue with you. That is enough for a first conversation.
How to send documents — and what not to send. Please do not put account numbers, login credentials, or images of identity documents into a web form or an ordinary email. Statements, correspondence, immigration and travel records, and prior filings move through a secure channel after conflicts screening, and I will tell you which of them I actually need. If a document is missing, say so rather than reconstructing it: a gap recorded as a gap is useful, and a gap filled by assumption is not.
What you get. A written analysis identifying which measure applies to your institution and from what date, which of your transactions are within the prohibitions at all, what must be reported and by when, what may lawfully be done with the account and by what route, and a reasoned recommendation on disclosure — coordinated with your tax and, where relevant, immigration position rather than delivered in isolation.
Viacheslav Kutuzov
VIACHESLAV KUTUZOV, Esq.
New York Attorney & Counselor-at-Law (6192033)
admitted to practice before the IRS (No.00144810-EA)
55 Broadway, Floor 3, New York, New York 10006
Phone: +1 646 8374669
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