Policy Issues • Terrorism and Illicit Finance
Sanctions
Sanctions are restrictions that limit access to assets, financial services, and markets for designated parties. Sanctions are commonly used to disrupt illicit networks, increase the costs of harmful activity, and incentivize behavior change.
What Sanctions Usually Do
- Block property: freeze assets and prohibit dealings with designated parties.
- Restrict transactions: prohibit certain activities, sectors, or types of services.
- Create compliance obligations: require screening, escalation, and recordkeeping.
How People Commonly Use Sanctions Information
Typical Workflow
- Screening: compare counterparties and beneficial owners against lists.
- Match review: confirm identity using identifiers, addresses, and context.
- Decision: clear, block/reject, or apply a license or exemption (when applicable).
- Documentation: retain evidence and rationale for audits and examinations.
Key Terms
- Designation: adding a party to a sanctions list or program.
- Blocked vs restricted: different programs can impose different requirements.
- Licenses: authorizations (general or specific) allowing otherwise prohibited activity.
Official Resources
Official sanctions information is published by the U.S. Treasury’s Office of Foreign Assets Control (OFAC).