Types of Sanctions

In the United States, most sanctions programs combine multiple types of designations that vary across multiple dimensions. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has designated individuals and entities under numerous and overlapping sanctions programs, some of which involve full asset freezes and prohibit all transactions with the designated entity, and others which bar certain types of financial transactions with certain sectors of a country’s economy. U.S. designations are constantly changing, and more individuals, entities, vessels, and aircraft are being added to OFAC’s sanctions list, especially after Russia’s invasion of Ukraine in 2022.

Comprehensive Sanctions target entire countries or geographic regions and prohibit most activity involving those jurisdictions. Comprehensive sanctions restrict access to all goods and services with the exception of authorizations listed in general or specific licenses, such as humanitarian aid. These programs are relatively static since there is little change in the countries/regions subject to comprehensive sanctions.

• The United States currently maintains comprehensive sanctions against Cuba, the Crimea, Donetsk, and Luhansk regions of Ukraine illegally occupied by Russia, Iran, Syria, and North Korea.

Regime-Based Sanctions target current or former governments or regimes accused by the United States of engaging in activities deemed to be a threat to U.S. national security, economy, or foreign policy. Most regime-based sanctions aim to protect human rights, combat state-sponsored or grand-scale corruption and kleptocracy, or support democratic processes, institutions, or the rule of law.

• The United States currently maintains regime-based sanctions against Iran, the Central African Republic, Syria, Türkiye, Cuba, and North Korea.

List Conduct-Based Sanctions target anyone involved in defined types of malicious activity. Persons and entities can be designated for involvement in terrorism, proliferation of weapons of mass destruction, bribery, corruption, human rights violations, drug trafficking, organized crime, election interference, or cyber-enabled malicious activity. Conduct-based sanctions endeavor to identify, disrupt, and deter these activities.

• The United States currently maintains conduct-based sanctions against those listed in the Specially Designated Nationals and Blocked Persons List (SDN list).

Sectoral Sanctions target entities in key sectors of a country’s economy that may be identified because of their links to government officials or decision makers. These sanctions are not meant to block all economic activity, but rather restrict economic growth or slow expansion. Sectoral sanctions were created after Russia’s invasion of Crimea in 2014.

Secondary sanctions are a unique type of sanctions that aim to pressure non-U.S. persons to stop dealing with sanctioned persons or jurisdictions by threatening to cut them off from access to U.S. markets or financial system. The most prominent example of secondary sanctions is in the case of the Iranian Revolutionary Guard Corps (IRGC). The United States will not conduct business with non-U.S. persons or entities dealing with the IRGC in any capacity, even if the transaction does not involve U.S. persons, businesses, or dollars.

The United States generally prefers to impose list-based sanctions because they provide the ability to target specific bad actors and be effectively and efficiently enforced through automated screening. Regime-based and comprehensive sanctions often have negative effects on a sanctioned nation’s civilian population, whereas list-based sanctions target the specific individuals and entities that pose a threat to national security without imposing punishment on the entire population.

U.S. persons and entities, especially those located in or conducting business with highly sanctioned countries or regions, are at high risk of violating various sanctions programs. OFAC follows a strict liability standard, which holds US persons liable for sanctions violations even if they had no knowledge that they were engaged in prohibited transactions.