The Office of Foreign Assets Control (OFAC), part of the U.S. Department of the Treasury, administers and enforces economic and trade sanctions. According to OFAC, they are aimed at targeted foreign jurisdictions and regimes, and at individuals and entities engaging in harmful activity. OFAC says it takes these steps when the national security, foreign policy or economy of the United States is threatened.
OFAC says sanctions can be comprehensive or selective. They use the blocking of assets and trade restrictions to reach foreign policy and national security goals.
Two ways programs are built
OFAC says its sanctions programs target either a particular jurisdiction, meaning a country or geographic region, or specified activities anywhere in the world. Terrorism and narcotics trafficking are the activity examples it gives. OFAC says it has no country-by-country list of places where U.S. persons cannot do business. Instead, it publishes a list of the sanctions programs it administers.
Each program has its own goals, so the prohibitions differ from one to the next. OFAC says most programs block the property of specific individuals or entities. It says some of the most comprehensive programs broadly prohibit transactions involving an entire jurisdiction.
As of Oct. 26, 2026, OFAC listed Cuba, Iran, North Korea, the Crimea region of Ukraine, and the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine as subject to broad jurisdiction-based sanctions. Those sanctions generally bar U.S. persons from most dealings with the jurisdiction, including exporting or importing goods, services or technology. On the same date, OFAC listed the governments of Cuba, Iran, North Korea and Venezuela as subject to government blocking sanctions. OFAC says sanctions programs may change frequently.
Other jurisdiction-related programs are narrower. OFAC gives its Nicaragua-related program as an example. It says that program does not generally prohibit transactions involving Nicaragua. OFAC also says sanctioned persons can be located anywhere in the world, not only in sanctioned jurisdictions.
Who must follow sanctions
OFAC says all U.S. persons must comply. That covers U.S. citizens and permanent residents no matter where they are, any individual or entity inside the United States, and U.S. incorporated entities and their foreign branches. In certain programs, foreign subsidiaries owned or controlled by U.S. persons must comply as well.
Non-U.S. persons are also subject to certain prohibitions, according to OFAC. For example, they may not cause or conspire to cause U.S. persons to violate U.S. sanctions. They also may not engage in conduct that evades the sanctions.
What blocking means
OFAC says blocking refers to freezing assets or other property. A blocked asset may not be transferred, withdrawn or otherwise dealt in. OFAC stresses that the property is frozen, not seized. Title stays with the blocked person, but the powers normally tied to ownership cannot be used without OFAC’s authorization.
OFAC says it does not hold blocked funds itself. U.S. financial institutions must block certain property in their possession or control and report it to OFAC. According to OFAC, parties have 10 business days after property becomes blocked to report it to the office.
Blocked persons include those on OFAC’s List of Specially Designated Nationals and Blocked Persons, known as the SDN List. They also include foreign governments subject to blocking and persons blocked under OFAC’s “50 Percent Rule.” OFAC says some programs block certain categories of people even if they are not on the SDN List, including most Cuban nationals. OFAC also keeps other lists of people subject to non-blocking sanctions.
Under the 50 Percent Rule, an entity owned 50 percent or more in the aggregate, directly or indirectly, by one or more blocked persons is itself blocked. OFAC gives this example: if one blocked person owns 25 percent of an entity and another blocked person owns 25 percent, the entity is blocked. The rule covers ownership only. OFAC says an entity that is merely controlled by blocked persons is not automatically blocked, although OFAC may designate it separately.
Licenses and exceptions
OFAC says there may be exceptions to sanctions prohibitions, in the form of licenses or exemptions. A license is an authorization from OFAC to engage in transactions that sanctions would otherwise prohibit. OFAC describes two types.
A general license authorizes certain categories of transactions and is public. OFAC calls it self-executing. Persons whose transactions meet its terms need no further authorization. OFAC says it issues general licenses in most programs, for matters such as humanitarian activities or official U.S. government business.
A specific license is a non-public document issued to a particular individual or entity for a particular transaction, in response to an application. OFAC reviews each application case by case, generally in the order received. It says it often coordinates with the U.S. Department of State and other agencies, such as the U.S. Department of Commerce. An applicant whose request was denied may ask for reconsideration at any time on the basis of changed circumstances or new facts.
Exemptions work differently, because certain types of transactions are simply not prohibited. OFAC says that in certain programs this covers personal communications, humanitarian donations, information or informational materials, and travel. It adds that exceptions vary in type and scope across programs. OFAC also says it does not sanction people for activities protected by the U.S. Constitution, such as protected speech or religious practice.
Penalties and reporting
OFAC says violations may bring civil penalties and, in some cases, criminal penalties. Civil penalties vary by program. Federal law requires OFAC to adjust the civil penalty amounts every year.
OFAC encourages anyone aware of a possible violation to report it through its Disclosure Portal. It says a voluntary self-disclosure is a mitigating factor that may reduce the base amount of a civil penalty. OFAC adds that reporting voluntarily may also make it more likely that no financial penalty is imposed.
The Treasury Department’s Financial Crimes Enforcement Network also runs a whistleblower incentive program covering sanctions violations. As of Sept. 9, 2026, OFAC said people who provide information may be eligible for awards if it leads to a successful enforcement action with monetary penalties above $1,000,000.