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The Office of Foreign Assets Control (OFAC) of the US Department of Treasury is tasked with administering and enforcing economic trade sanctions against particular foreign governments, individuals, entities and activities. OFAC has jurisdiction over U.S. citizens, permanent resident aliens entities subject to U.S. law, Cuba, Iran and transactions that have a strong U.S. nexus. In certain cases OFAC may bring sanctions against transactions involving goods and technology that were produced or assembled in the United States.
Sanctions Programs
Comprehensive Restrictions
Comprehensive programs block nearly all trade with a specified country. The most prominent comprehensive programs currently are those against Cuba, Iran, North Korea and Syria. There are also very strong sanctions programs relating to other countries such as Venezuela and Ukraine but these programs are particularized to target certain events.
Limited Programs
Limited programs have very specific guidelines such as the prohibition of exportation to a country but not importation. These programs have outlined guidelines that specify how to interact with the targeted country or economic activity. These limited programs may be established through exemptions in general licenses or a mandate for specific licenses regarding certain transactions.
List Based Programs
Most OFAC programs and sanctions fall under a list system in which individuals, entities, activities or regimes are added to or removed from a list of blocked individuals regularly. The most expansive list is the Specially Designated Nationals and Blocked Persons (SDN) list. The lists are usually used to target very specific activities such as terrorism, narcotics trafficking, criminal organizations, piracy, human rights abuses, foreign sacntion evaders or particular regime formation and activism.
SDN List
The SDN list has more than five thousand entries and is updated multiple times a week. Foreign banks are often placed on this list for effecting transactions of blocked entities or individuals. The Foreign Sanctions Evaders (FSE) list is very similar except it is for a particular activity, as expressed by the name of the list, and also the individuals on this list are subject to rejection instead of blocking like those on the SDN list. Both lists are available on the OFAC website which are also paired with a comprehensive search tool.
Another, very specific, list is the Sectoral Sanctions Identification List. This list was created as a direct result of the “Blocking Property of Additional Persons Contributing to the Situation in Ukraine” executive order, issued in 2014. This list has the sole purpose of identifying and blocking individuals or entities that operate in sectors of the Russian economy identified as actively contributing to the situation with Ukraine. This list is not updated often but should still be checked if dealing with Russian entities.
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