If a bank finds that a foreign operation involving the transfer of funds violates certain sanctions programs, the funds become blocked. Our OFAC blocked asset attorneys can help with unblocking applications.
Often, institutions are able to resolve blocked funds issues by properly filing a license application with OFAC. The following are a few things to consider about this process.
A blocked account refers to any financial account that has been placed on a list of sanctioned accounts or otherwise frozen by the government. The difference between a blocked and an unblocked account is that a blocked account typically has restrictions on when, how much, or by whom capital can be withdrawn from the account.
The purpose of a blocked account is to provide protection against fraud or other types of risk that can occur when an individual or business transfers funds into a bank. Blocked accounts often are not unblocked until the Office of Foreign Assets Control grants a specific release.
Opening a blocked account is necessary for students coming to Germany from non-EU countries as they need to prove their financial capabilities for the duration of their stay in the country to obtain their visa. Expatrio offers a quick and convenient online service to set up the blocked account that is accepted by German authorities in just minutes. Tip: choose the 'Value Package' to save on set-up fees!
If a person's money is blocked by the Office of Foreign Assets Control, you can ask the court for permission to withdraw those funds. However, a person needs to prove that the withdrawal is necessary and in the best interest of the person before the court will approve the request.
A judge may consider a minor child's settlement funds for school tuition or educational camp as a reason to unblock an account. However, a judge is less likely to allow such a request if the money is being used for a vacation or an expensive personal item.
A conservator of a disabled adult may use funds in a blocked account if the court has directed that those funds be applied to the individual's care and maintenance. However, a conservator must follow the provisions of any court order that establishes an account to determine whether those funds should be considered accessible and countable as a resource for SSI purposes.
There are a few things to remember about filing a petition for the release of blocked funds. First, it is important to have a clear reason for wanting to withdraw the money. This includes demonstrating that it is necessary and in the best interests of the protected person.
Second, it is important to file all of the required documents. This includes the Petition and a Notice of Hearing that contains the date, time, and name of the judicial officer who will hear the case. It is also important to serve the protected person, their attorney, and their relatives with all of these papers.
It is helpful to have a lawyer familiar with civil law procedures, including OFAC cases, handling your petition for the release of blocked funds. This is because OFAC considers unblocking applications very similarly to specific license authorization requests. This means you will need to provide a great deal of information to OFAC about the transaction that caused your funds to be blocked in order to get it unblocked.
In some instances, funds are blocked by a bank after they review the transaction and find it appears to be in violation of sanctions regulations. Sometimes this is because the party involved in the transaction is on the sanctions list.
If a minor or conserved adult is the beneficiary of the blocked account, then the court order granting the conservatorship should be reviewed to determine if the expenditure of the monies on that person’s support and maintenance is one of the conservator’s duties. If it is, then funds held by the conservator in a “blocked” account should be presumed accessible to the ward and therefore countable as a resource.
If you want to pursue the unblocking of these funds, then you will need to file an OFAC Blocking Removal Application, which is a lot like a specific license authorization application. The attorney you hire will be able to help you navigate this process, including gathering all the information available to demonstrate to OFAC that there is no sanction violation and that the transaction should not be blocked.