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What an asset freeze means in practice: US, UK, EU and UN rules

Last checked: 20 October 2026 · Measures explained

An asset freeze stops anyone moving, using or dealing with money and other property that belongs to a listed person, and bars making new funds available to them 1,3 4. The owner keeps legal title and the assets are not confiscated 1,3. In the US this is called blocking and is run by OFAC 1. In the UK, OFSI runs it 3. In the EU, each Member State's competent authority grants exceptions 4. UN Security Council resolutions require states to freeze the assets of designated persons 5.
US term
Blocking, under OFAC rules 1
US ownership rule
Entities owned 50 percent or more, in aggregate, by blocked persons are blocked 1
US reporting deadline
Report blocked property to OFAC within 10 business days 1
UK ownership test
More than 50% of shares or voting rights, directly or indirectly, among other tests 3
UK reporting
Relevant firms tell OFSI as soon as practicable 3
UK licensing body
OFSI, part of HM Treasury 3
EU licensing
Competent authorities of Member States 4
Ownership of frozen assets
Stays with the listed person 1,3

The basic idea

OFAC says blocking "immediately imposes an across-the-board prohibition against transfers or dealings of any kind" in the property 1. Blocked property "may not be transferred, withdrawn, or otherwise dealt in" 1. Title to the blocked property remains with the blocked person 1.

UK guidance says the same about ownership. It states that "An asset freeze does not involve a change in ownership of the frozen funds" and that frozen assets are not confiscated or handed to OFSI 3.

United States: blocking

OFAC treats blocking as freezing 1. All US persons must comply with OFAC sanctions, including US citizens and permanent residents wherever they are 1.

Under OFAC's 50 percent rule, property of an entity owned "individually or in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons" is blocked 1. This applies whether or not the entity is itself on the SDN List 1.

Anyone holding blocked property must report it to OFAC within 10 business days of the property becoming blocked 1. General licences are self-executing and let anyone meeting their terms go ahead without applying 1. A specific licence covers only the named licensee and needs an application 1. OFAC takes applications online through its Application Portal 2.

United Kingdom: asset freeze

OFSI guidance says it is prohibited to deal with frozen funds or economic resources belonging to, or owned, held or controlled by, a designated person 3. It is prohibited to make funds or economic resources available to a designated person, or for their benefit, directly or indirectly 3. Dealing includes moving, transferring, altering, using or accessing funds in any way that changes their volume, location or ownership 3.

An entity counts as owned or controlled by a person who holds, directly or indirectly, more than 50% of its shares or voting rights 3. Control can come from the right to appoint or remove most of the board 3.

A bank may credit a frozen account with interest or other earnings without a licence, so long as those funds are frozen immediately 3. OFSI issues licences only where a specific licensing ground applies, such as basic needs or reasonable legal fees, and never retrospectively 3. A general licence lets many parties act without their own licence. A specific licence is written permission issued after an application 3. Breaching the terms of a general licence carries a maximum of 7 years' imprisonment on indictment, a fine, or both 3.

European Union: freezing of funds

Each EU sanctions regime has its own regulation. This page uses Regulation (EU) 2020/1998, the global human rights regime, as an example 4. It defines freezing of funds as "preventing any move, transfer, alteration, use of, access to, or dealing with funds in any way" 4. Freezing of economic resources means preventing their use to obtain funds, goods or services, for example by selling, hiring or mortgaging them 4.

Member State competent authorities may authorise release for basic needs, reasonable legal fees, humanitarian purposes, some court decisions and contracts made before listing 4. Banks may credit frozen accounts with incoming payments and interest, which stay frozen 4. A person who freezes funds in good faith is not liable for doing so, provided there was no negligence 4.

United Nations: freezes set by the Security Council

UN asset freezes are set in Security Council resolutions and apply to people a sanctions committee designates 5,6. Under paragraph 3(e) of resolution 1591 (2005), on Sudan, states must freeze "all funds, other financial assets and economic resources owned or controlled by individuals and entities" designated by the committee 5.

Each regime sets its own exemptions. For the DRC regime, they are in paragraph 16 of resolution 1596 (2005) and paragraph 12 of resolution 1807 (2008) 6.

Side by side

The table compares the terms and the bodies that grant licences 1,3 4,5.

PointUSUKEUUN
Term used 1,3 4,5Blocking 1Asset freeze 3Freezing of funds and economic resources 4Assets freeze 5
Who grants exceptions 2,3 4,6OFAC, by general or specific licence 1,2OFSI, part of HM Treasury 3Member State competent authorities 4Set out in each resolution 6

Common questions

Does an asset freeze mean the government takes the money?

No. OFAC says title stays with the blocked person 1. UK guidance says frozen assets are not confiscated and ownership does not change 3.

Can a frozen bank account earn interest?

In the UK, interest may be credited if it is frozen immediately 3. Under the EU human rights regulation, interest and incoming payments may be credited and stay frozen 4.

What is the OFAC 50 percent rule?

Entities owned 50 percent or more, individually or in aggregate, directly or indirectly, by blocked persons are blocked even if they are not on the SDN List 1.

How do I apply to release frozen funds?

In the US, apply to OFAC for a specific licence through its Application Portal 2. In the UK, apply to OFSI on a recognised licensing ground 3. In the EU, apply to the Member State competent authority 4.

Who must report frozen assets?

In the US, holders must report blocked property to OFAC within 10 business days 1. In the UK, relevant firms must tell OFSI as soon as practicable 3.

Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email [email protected] with the official link.

Sources

  1. OFAC, US Treasury: Basic Information on OFAC and Sanctions, FAQs (accessed 20 October 2026)
  2. OFAC, US Treasury: OFAC Specific Licenses and Interpretive Guidance (accessed 20 October 2026)
  3. OFSI, HM Treasury: UK financial sanctions general guidance (updated 12 May 2026)
  4. EUR-Lex: Council Regulation (EU) 2020/1998 concerning restrictive measures against serious human rights violations and abuses (7 December 2020)
  5. UN Security Council: Committee established pursuant to resolution 1591 (2005) concerning the Sudan (accessed 20 October 2026)
  6. UN Security Council: Committee established pursuant to resolution 1533 (2004) concerning the Democratic Republic of the Congo (accessed 20 October 2026)

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