9. What does OFAC mean when it refers to "blocked" property? How does OFAC define “property”?
"Blocking" refers to freezing assets or other property. Blocking immediately imposes an across-the-board prohibition against transfers or dealings of any kind with regard to the property.
OFAC authorities may require U.S. persons to block all property and interests in property of certain persons, known as "blocked persons." When this is the case, any property and interests in property of a blocked person that are within the United States or within the possession or control of a U.S. person must be blocked (i.e., "frozen")—not seized—and may not be transferred, withdrawn, or otherwise dealt in. Title to the blocked property remains with the blocked person, but the exercise of powers and privileges normally associated with ownership is prohibited without authorization from OFAC.
In addition, parties must report blocked property to OFAC within 10 business days of the property becoming blocked. Blocked persons include persons that appear on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), foreign governments subject to blocking, and persons blocked pursuant to OFAC’s “50 Percent Rule.” For further information, see FAQ 401 and OFAC guidance on the "50 Percent Rule."
The term "property," as defined in various OFAC regulations, includes financial property (e.g., money, checks, savings accounts, stocks, bonds, debt, or any other financial instruments), real, tangible, and intangible assets (e.g., goods, merchandise, ships, land contracts, and real estate), and any other property or interests therein present, future, or contingent. For information on how OFAC defines property in a particular sanctions program, please see the relevant OFAC implementing regulations and the Sanctions Programs and Country Information page on OFAC’s website.
Date Updated: August 21, 2024.
Updated on Aug 21, 2024
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9. What do you mean by "blocking?"
Another word for it is "freezing." It is simply a way of controlling targeted property. Title to the blocked property remains with the target, but the exercise of powers and privileges normally associated with ownership is prohibited without authorization from OFAC. Blocking immediately imposes an across-the-board prohibition against transfers or dealings of any kind with regard to the property. [09-10-02]
1) FAQ amended on 8-21-24 concurrent with Modernizing Treasury’s Office of Foreign Assets Control (Press Release), detailing several modernization efforts, including the updating of a number of general interest FAQs containing dated language. This FAQ provides guidance on the meaning of “blocked property” in a way that does not add to or deviate from modern guidance. The comments below were drafted (not amended) prior to the 8-21-24 amendment.
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Notes:
1) The wording of this is somewhat misleading. Property is only "blocked," in the sense of it being frozen, if it at some point actually comes within the possession or control of a U.S. person or other person subject to a blocking regulation. However, all property in which a blocked person has an "interest" is also considered "blocked" in the sense that no U.S. person may deal in the property, irrespective of whether the property has ever actually come within the possession or control of a U.S. person. The term "blocked" is used loosely to describe both situations, but the "possession or control" question is often legally crucial.
For an example of property that is no longer “blocked” because of a lack of U.S. person possession, but nevertheless remains “blocked” in the sense that no U.S. person may deal in it, see Pacific Solar Energy, SA de CV v. United States Department of the Treasury et al (D.D.C., 2019) - Declaration of OFAC Asst. Dir. Of SC&E.
Compare FAQ 402.