SanctionLab said on the 27th that it received authorization from the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) to recover export proceeds frozen at an overseas bank for a domestic corporations after a sanctioned vessel became involved in transportation during exports to the Middle East.
SanctionLab is an economic security specialty company that provides sanction risk analysis, counterparty due diligence, export-import sanctions review, frozen asset release support, and advisory services for responding to OFAC, the European Union (EU), and the United Nations (UN) sanctions.
In this case, the exporting corporations did not violate separate regulations, but an overseas financial institution froze the export proceeds after a sanctioned vessel became entangled in the transport process. The corporations exported goods to the Middle East, but an overseas bank froze the related funds, preventing receipt of export proceeds amounting to hundreds of thousands of dollars.
The corporations requested payment, but the bank maintained that it could not pay without authorization from the U.S. government. The corporations then sought advice from overseas specialist law firms and large domestic law firms, but faced difficulties responding due to high expense burdens such as retainers reaching tens of thousands of dollars.
Unlike ordinary trade disputes or payment recovery procedures, sanctions and frozen asset release work is a field where OFAC regulations of the U.S. Department of the Treasury and financial institutions' sanction risk assessments are applied together. In particular, because many large domestic and foreign law firms handle cases in collaboration with Washington, D.C.-based firms, it is known to impose a heavy expense burden on small and midsize corporations.
SanctionLab reviewed the transaction background and legality, whether export control violations occurred, connections to sanctioned parties, and the financial institution's reasons for freezing the funds, then submitted explanatory materials to OFAC. After maintaining contact with OFAC for about a year, it obtained authorization to recover most of the frozen export proceeds.
A SanctionLab official said, "This case shows that even if corporations do not directly violate sanctions, they may fail to receive legitimate export proceeds due to sanction risks arising in global logistics and financial networks."
The official added, "Sanction risk is no longer an issue only for large corporations or financial institutions; it is becoming a direct management risk for small and midsize corporations engaged in overseas exports."