An essential component of conducting international business is accurately identifying the countries that are closed to trade. The Office of Foreign Assets Control (OFAC) plays a key role in maintaining an up-to-date list of countries which are subject to OFAC sanctions. In doing so, OFAC protects international trade and the interests of the USA. Sanctioned country as well as foreign nationals encounter fines and a loss of corporate reputation, so, it’s better to know which foreign countries are under sanctions and OFAC regulations.
What are OFAC-Sanctioned Countries?
OFAC-sanctioned countries are those which face trade and economic restrictions for a variety of reasons, such as involvement in terrorism, arms trafficking, or activities that pose a threat to U.S. national security or foreign policy.
OFAC maintains a publicly accessible list of entities, including companies, organizations, and individuals, that are subject to these sanctions. The measures imposed often include trade embargoes, financial transaction prohibitions, and tariffs, along with restrictions on investments, arms dealings, and the movement of goods such as exports and imports.
In alignment with these efforts, OFAC maintains the Specially Designated Nationals and Blocked Persons List (SDN), which includes entities with whom U.S. citizens and businesses are strictly prohibited from engaging in any financial or commercial dealings. The assets of those listed are frozen, and individuals on the list are banned from entering the United States. Additionally, OFAC enforces secondary sanctions that target foreign entities or United States persons conducting business with sanctioned parties, extending the reach of these restrictions beyond direct U.S. jurisdiction.
If you’ve encountered an issue with OFAC SDN list, seeking legal support from experienced sanctions solicitors is a must. Our team of qualified OFAC lawyers provide SDN legal services and will help get delisted, comply with the sanctions list and develop an action plan to mitigate the effects of sanctions.
Understanding Economic Sanctions
Economic sanctions are powerful tools used by governments or international organizations to influence the behavior of targeted nations, organizations, or individuals. These sanctions typically involve the restriction of financial transactions, trade, blocking of funds or access to goods and services as a means of exerting political or economic pressure.
Sanctions can take various forms, including:
- Trade Restrictions – Limitations or bans on the import or export of certain goods and services.
- Asset Freezes – Blocking access to financial assets or properties held in foreign jurisdictions.
- Financial Transaction Prohibitions – Restricting access to banking systems or other financial networks.
- Travel Bans – Preventing sanctioned individuals from entering certain countries or regions.
Sanctions are often implemented in response to activities that threaten national security, violate international law, or destabilize regions. Common triggers include human rights violations, terrorism, nuclear proliferation, and aggressive military actions.
The Seven Sanctioned Countries
The list of countries under sanctions regulations is determined based on the foreign policy and national interests of the USA. OFAC coordinates its activities with international partners and organisations to ensure the effectiveness of trade sanctions programs.
Cuba
Sanctions against Cuba were first introduced in 1960 following the Cuban Revolution of 1959. The new government, led by Fidel Castro, nationalised American property without compensation. In 1962, President John F. Kennedy expanded the sanctions to a full trade embargo in response to the establishment of close ties between Cuba and the USSR. The sanctions regulations are also linked to human rights abuses, restrictions on political freedoms, and freedom of speech on the island.
Iran
Sanctions against Iran were first imposed in 1979 following the Islamic Revolution and the seizure of the American embassy in Tehran, during which 52 American diplomats were held hostage for 444 days. In the years that followed, sanctions were intensified in response to Iran’s development of a nuclear program, which, according to the international community, could lead to the creation of nuclear weapons. In 2006, the UN introduced international sanctions, while the US and the EU successively expanded their restrictions. The sanctions are also linked to Iran’s support for various armed factions in the Middle East, which the US considers terrorist organisations.
North Korea
Sanctions against North Korea were first introduced during the Korean War in 1950. The sanctions were significantly intensified starting from 2006, following North Korea’s first nuclear test. In response to nuclear and missile tests that violated UN Security Council resolutions, the international community, including the USA, imposed strict economic and trade sanctions. These sanctions aim to limit North Korea’s access to technologies and resources needed for the development of its nuclear and missile program.
Russia
OFAC Sanctions on Russia were introduced in 2014 following the annexation of Crimea and the onset of armed conflict in eastern Ukraine. The USA, the EU, and other countries imposed targeted sanctions on the Russian economy: energy, finance, and defence. In 2016, the sanctions were expanded due to allegations of Russia’s interference in the US presidential elections.
Syria
The initial sanctions against Syria were introduced in 2004 due to its support for terrorism and attempts to develop weapons of mass destruction. In 2011, following the outbreak of the civil war and brutal repression against civilians by President Bashar al-Assad’s regime, the US significantly expanded the sanctions. These restrictions include freezing assets, export regulations and investments, as well as sanctions against individuals and organisations supporting the Syrian government.
Venezuela
OFAC sanctions against Venezuela were first introduced in 2015 in response to human rights violations, corruption, and the undermining of democratic institutions under President Nicolas Maduro. In 2017 and 2018, the sanctions were expanded to include restrictions on financial transactions, a ban on dealings with sovereign debt, and sanctions against the oil sector, which is the country’s main source of income.
Crimea, Donetsk, and Luhansk
Following the referendum in Crimea in March 2014 and its subsequent annexation by Russia, the US and the EU imposed sanctions against Crimea. These restrictions include a ban on importing goods from Crimea, investments, tourist services, and the export of certain goods and technologies. Regarding the self-proclaimed Donetsk and Luhansk People’s Republics in eastern Ukraine, sanctions were introduced due to the destabilisation of the region, support for separatists, and violation of Ukraine’s territorial integrity.
For those who wants to make a business with sanctioned countries OFAC issue licenses. There are two kinds of them: general license and special. If you’re planning to collaborate with countries that are under sanctions, we recommend getting in touch with our OFAC license attorney. You will receive qualified legal support to conduct all the necessary checks and secure a licence for lawful business operations. Our OFAC lawyers will help you avoid asset freezes or fines, and reduce the risk of secondary sanctions that could affect your business dealings with foreign partners.
How to Check the List of OFAC-Sanctioned Countries?
To check the current list of countries, organisations, and individuals subject to OFAC sanctions, you can follow the link: https://sanctionssearch.ofac.treas.gov/ . This is an official online search tool provided by the OFAC. The resource is designed for checking individuals and legal entities to see if they are included in sanction lists, such as the Specially Designated Nationals and Blocked Persons List (SDN List) and other trade sanctions programs administered by OFAC.
The website enables businesses and individuals to search for names, addresses, or other identifying information to determine whether a potential partner or counterparty is subject to US sanctions.
The Consequences For Your Businesses
The most crucial aspect for business owners is to have up-to-date information. Before entering into contracts and conducting trade operations with countries in high-risk areas, it’s essential to check whether they are on the OFAC list. Doing business with individuals or organisations on the SDN list can lead to serious legal and financial consequences.
- Financial penalties: For breaching the sanctions regime, you could face significant monetary fines from regulatory bodies.
- Legal consequences: Your actions could lead to legal issues, including court proceedings, being held accountable, and the need for legal defence.
- Operational disruptions: Sanctions could lead to interruptions in your company’s operations, such as the freezing of assets, restrictions on conducting business, and the severing of business relationships.
- Reputational damage: Violating sanctions can negatively impact your company’s image, undermine the trust of clients, partners, and investors, potentially leading to a loss of business.
- Criminal liability of management: The company’s leadership could face criminal charges, which may lead to prosecution and the possibility of imprisonment.
Contact Sanctions Lawyers
Should you encounter any issues with sanctions or require legal support in obtaining a licence to trade with countries under sanctions, our OFAC sanctions lawyers are ready to assist you. Our team of lawyers, with years of experience in sanctions, knows the lawful ways to address your concerns. Call us for a consultation and to learn how to ensure your business complies with all legislative requirements.
