So...what happens to the money in the account? AFAIK normally when your account is closed, your bank gives you a cashier's check which you can use to open an account at another bank. But given that they're in OFAC, what if no other bank will have them?
Does someone who works for A/I have to drive to Italy and pick up a briefcase full of cash? Or does the money stay in the bank, inaccessible to A/I, until A/I proves they aren't terrorists? Which could be...forever, since it's basically impossible to improve you're not a terrorist once you're formally included on The Big List Of Terrorists? How do you hire a lawyer to argue your case if the money you would use to pay them has already been taken away?
Great question! Here's the answer: an entity on the SDN (Specially Designated Nationals) List, basically has all financial operations withdrawing or moving funds out of an account denied. There is no "closing" allowed. Those assets are, for all intents and purposes, frozen.
Except... Deposits still go through! It is intentional to the design that all operations around taking in money be left enabled. Also, it is strictly forbidden to inform someone that the reason for the declining of outgoing transactions is because one is on the SDN.
In short, the goal of imposing sanctions is to lock down the maximum assets possible of a sanctioned entity within the influence of the U.S. financial system.
Your observations about the problematic nature of OFAC are quite astute. You are added at the whims of the Executive Branch of the U.S. government. They won't go out of their way to tell you you are on it, and they don't let anyone else tell you either. There is in theory a process to petition to get off it, but gooooood luck with that.
Comments
So...what happens to the money in the account? AFAIK normally when your account is closed, your bank gives you a cashier's check which you can use to open an account at another bank. But given that they're in OFAC, what if no other bank will have them?
Does someone who works for A/I have to drive to Italy and pick up a briefcase full of cash? Or does the money stay in the bank, inaccessible to A/I, until A/I proves they aren't terrorists? Which could be...forever, since it's basically impossible to improve you're not a terrorist once you're formally included on The Big List Of Terrorists? How do you hire a lawyer to argue your case if the money you would use to pay them has already been taken away?
Great question! Here's the answer: an entity on the SDN (Specially Designated Nationals) List, basically has all financial operations withdrawing or moving funds out of an account denied. There is no "closing" allowed. Those assets are, for all intents and purposes, frozen.
Except... Deposits still go through! It is intentional to the design that all operations around taking in money be left enabled. Also, it is strictly forbidden to inform someone that the reason for the declining of outgoing transactions is because one is on the SDN.
In short, the goal of imposing sanctions is to lock down the maximum assets possible of a sanctioned entity within the influence of the U.S. financial system.
Your observations about the problematic nature of OFAC are quite astute. You are added at the whims of the Executive Branch of the U.S. government. They won't go out of their way to tell you you are on it, and they don't let anyone else tell you either. There is in theory a process to petition to get off it, but gooooood luck with that.
https://sanctionslawyers.net/ofac-lawyers/how-to-get-off-ofa...