A working reference for companies whose transactions touch more than one sanctions regime. It is descriptive, not advisory: what the instruments say and how they operate in practice.
The SDN List and blocking. The Office of Foreign Assets Control, part of the US Treasury, maintains the Specially Designated Nationals and Blocked Persons List. Designation blocks the party’s property and interests in property within US jurisdiction and prohibits US persons from dealing with them. In commercial terms the immediate effects are usually indirect: correspondent banking relationships close, letters of credit are refused, insurers withdraw, and counterparties disengage — often before any formal notification reaches the designated party.
The 50 percent rule. An entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself blocked, whether or not it appears on the list. Ownership held by several blocked persons is aggregated. This is the provision most often missed in screening, because it requires ownership analysis rather than a name match.
General and specific licences. A general licence authorises a defined category of transaction without individual application. A specific licence is issued to a named applicant for a named transaction. Neither is a right: a general licence can be amended or revoked at any time. Transactions whose duration exceeds the life of the authorisation — letters of credit, voyages, instalment payments — require the revocation scenario to be addressed in the contract, not assumed away.
Wind-down authorisations. Following a designation, OFAC frequently issues a time-limited authorisation permitting the orderly termination of pre-existing transactions. These periods are short and strictly construed; what is not completed within the window generally cannot be completed afterwards.
Secondary sanctions. Certain programmes reach non-US persons for conduct occurring wholly outside the United States. This is the mechanism through which companies with no US nexus become exposed.
Administrative reconsideration — 31 CFR 501.807. A designated party may petition for removal. The petitioner must establish either that the designation rests on an insufficient basis, or that circumstances have materially changed. Since June 2026 petitions are received through an online portal, which centralised intake without altering the substantive standard. OFAC gives no commitment as to timing.
EU sanctions are adopted by Council decision and given effect by directly applicable regulations. They bind EU nationals wherever located, entities incorporated under the law of a member state, and any business done in whole or in part within the Union. Certain programmes — the Russia regime in particular — restrict the provision of defined services, with carve-outs whose scope is narrower than commonly assumed. Establishment in the EU is therefore a material fact for any adviser or intermediary, not a neutral one.
Financial sanctions are administered by the Office of Financial Sanctions Implementation, part of HM Treasury. The UK regime is now autonomous and diverges from the EU regime in both listings and licensing practice. A party listed in one is not necessarily listed in the other, and divergence between them has become a recurring practical problem for transactions touching both.
Security Council resolutions adopted under Chapter VII impose asset freezes and travel bans that member states implement through domestic law. UN measures are narrower in scope than the autonomous regimes but, unlike them, carry near-universal domestic effect.
Türkiye implements United Nations Security Council asset-freeze decisions through Law No. 7262 on the Prevention of Financing of the Proliferation of Weapons of Mass Destruction, with MASAK as the responsible authority. Türkiye does not automatically implement the autonomous sanctions programmes of the United States, the European Union or the United Kingdom.
The practical consequence is frequently misunderstood. For a company operating in Türkiye, exposure to those programmes is not primarily a question of Turkish law. It arrives through the banking system, through counterparties, insurers and classification societies, and through the contracts the company has signed. A transaction may be entirely lawful in Türkiye and still be impossible to bank, insure or complete.
A section describing, in sequence, what actually occurs: publication in the Recent Actions feed and the list update; automatic ingestion by commercial screening vendors within hours; correspondent bank alerts; refusal of new letters of credit and review of existing ones; insurer and P&I club notification; classification society review; counterparty notices under sanctions clauses. Understanding the sequence matters because the response has to be built around it.
Why name matching alone fails: transliteration variants, aliases, ownership rather than identity, vessels changing name and flag, intermediaries and re-invoicing. What a screening workflow has to capture beyond a list hit, and what has to be recorded when a hit is cleared.
Why exposure most often materialises through banking rather than through enforcement; why a bank’s decision to exit a relationship is commercial and not appealable; what documentation supports a banking relationship under scrutiny.
Vessel designation and its effect on voyage, freight collection, class and insurance; third-party cargo on a blocked vessel; the difference between tanker and container exposure; port call and route analysis.
A single transaction can be authorised under one regime and prohibited under another. A party may be delisted by one authority while remaining listed by a second. Screening against a single list, or against a single vendor’s consolidated feed, does not answer the question that matters.
Not as a matter of Turkish law. Türkiye gives effect to United Nations Security Council asset-freeze decisions — under Law No. 6415 for terrorism-related listings and Law No. 7262 for proliferation-financing listings — through Presidential decisions published in the Official Gazette, with MASAK as the implementing authority. The autonomous sanctions programmes of the United States, the European Union and the United Kingdom have no direct legal force in Türkiye. A transaction that OFAC prohibits for a US person may be entirely lawful for a Turkish company under Turkish law. The exposure arrives through the US nexus. A payment in US dollars clears through a US correspondent bank, which is a US person and is required to block or reject a transaction involving a designated party. Goods of US origin, and foreign-made goods containing more than a threshold share of controlled US content, remain subject to the Export Administration Regulations wherever they are. A US-incorporated subsidiary, a US citizen employee or a US-based server can each bring a transaction within OFAC’s reach. The second route is secondary sanctions. Under several programmes — Russia, Iran and North Korea among them — a non-US company can itself be designated for conduct that took place wholly outside the United States. Since December 2023, foreign financial institutions face designation or loss of US correspondent access for facilitating significant transactions for Russia’s military-industrial base (Executive Order 14024, section 11, as amended by Executive Order 14114). That mechanism, rather than any Turkish rule, explains the tightening of Russia-related payments by Turkish banks. The third route is contractual. Correspondent banks, insurers, P&I clubs, classification societies, charterers and larger buyers apply OFAC, EU and UK standards through their own terms; EU exporters are required to include a “no-Russia” clause in contracts with buyers in third countries (Regulation 833/2014, article 12g). A Turkish company with no legal duty to comply will still find that it cannot bank, insure or ship without doing so. The useful question is therefore not whether compliance is required, but where the company’s exposure sits and which regime creates it. Sources: Law No. 6415; Law No. 7262; 31 CFR Part 501; Executive Orders 14024 and 14114; Council Regulation (EU) 833/2014, art. 12g.
Under OFAC guidance of 13 August 2014, an entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself blocked. It does not need to appear on the SDN List. The prohibition attaches automatically, and a person dealing with such an entity is in the same position as one dealing with a listed party. Two features of the rule are regularly missed. First, the holdings of several blocked persons are aggregated: three blocked shareholders with 20 percent each together meet the threshold. Second, the rule follows the chain. If blocked Company A owns 50 percent of Company B, Company B is blocked; any entity in which Company B holds 50 percent or more is blocked in turn, however small A’s economic interest in the final entity has become. The chain breaks only at a link below 50 percent. The OFAC rule is about ownership, not control. A blocked person holding 40 percent but exercising effective control does not trigger it, although OFAC has said it may designate such entities separately and has cautioned against dealing with them. The EU and UK regimes go further: restrictions extend to entities “owned or controlled” by a listed person (Council guidance under Regulation 269/2014; UK regulation 7 of the Russia (Sanctions) (EU Exit) Regulations 2019), which can catch minority-owned entities that the OFAC rule does not. A divestment that brings the blocked holding below 50 percent means the entity is no longer treated as blocked for future transactions, provided the divestment itself took place outside US jurisdiction and without US persons. It does not release property that was already blocked while the threshold was met: under OFAC FAQ 402 such property stays blocked until OFAC authorises its release or the blocked person is removed from the list. OFAC also examines whether the transfer was real — a sale to a relative, a nominee or an entity the blocked person still controls does not achieve it. For screening, the consequence is that a name match against the list is not the test. Ownership has to be established from registry filings, shareholder records and, where these are unavailable or unreliable, from other evidence, and the analysis has to be recorded. Sources: OFAC, Revised Guidance on Entities Owned by Blocked Persons (13 August 2014); OFAC FAQs 398–402; Council Regulation (EU) 269/2014; UK SI 2019/855, reg. 7.
They belong to different agencies and do different things. The Specially Designated Nationals and Blocked Persons List is maintained by OFAC, part of the US Treasury. Designation blocks the party’s property within US jurisdiction and prohibits US persons from virtually all dealings with it — payments, services, goods, contracts. The 50 percent rule extends the block to entities the designated party owns. The commercial effect is immediate and broad: banks, insurers and counterparties disengage. The Entity List is maintained by the Bureau of Industry and Security, part of the US Commerce Department, under the Export Administration Regulations (15 CFR Part 744, Supplement No. 4). Listing does not freeze assets and does not, by itself, prohibit payments or services. It imposes a licence requirement — usually with a presumption of denial — on the export, re-export or in-country transfer of items subject to the EAR to the listed party. Its reach depends on the goods: US-origin items, foreign-made items with more than a threshold share of controlled US content, and certain items produced with US technology or equipment under the foreign direct product rules. For a company outside the United States, the practical distinction is this. A counterparty on the SDN List is, in effect, unbankable in any currency that touches the US system. A counterparty on the Entity List can be paid and dealt with, but cannot be supplied with items subject to the EAR without a licence — and the supplier, wherever located, is the one who breaches the rule. A party can appear on both lists. Screening should cover both, together with the other BIS lists (the Unverified List and the Military End-User List) and OFAC’s non-SDN lists (the Sectoral Sanctions Identifications List, the CAPTA List and the Non-SDN Chinese Military-Industrial Complex Companies List). Sources: 31 CFR Part 501; 15 CFR Parts 734, 736 and 744; US Consolidated Screening List.
In most cases, no. If the account held funds in which the designated party had an interest, the bank would be required to block those funds. But the closure of a customer’s own account, where the customer is not designated and holds no blocked property, is not something OFAC, the EU or OFSI orders. It is the bank’s decision, taken under its account agreement and its own risk policy. The decision is commercial. A Turkish bank that clears US dollars depends on a US correspondent, and that correspondent sets conditions. A customer with a recently designated counterparty, a history of transactions with sanctioned jurisdictions, or an ownership structure that cannot be verified is a customer the correspondent may decline to see. The account is closed to protect the relationship upstream. The practice is known as de-risking, and since December 2023 the secondary-sanctions exposure of foreign banks has made it more common. Because the decision is commercial, there is no appeal to a sanctions authority. What can be done is to address the bank’s underlying concern with documentation: evidence that the relationship with the designated party has ended, that any wind-down took place within the relevant authorisation, that screening is in place and that ownership of the company is transparent. Banks reopen or maintain relationships on the strength of a file, not on assurances. The same analysis applies to insurers, P&I clubs and classification societies, all of which apply sanctions standards through their own terms and can terminate for the same reason. Sources: 31 CFR 501.603 (blocked property reporting); Executive Order 14114; OFAC FAQ 1151 (foreign financial institutions).
A general licence is an authorisation, published by a sanctions authority, that permits a defined category of transaction that would otherwise be prohibited. Anyone whose transaction falls within its terms may rely on it without applying. A specific licence, by contrast, is issued to a named applicant for a named transaction after an individual application. General licences serve many purposes: humanitarian trade, payment of legal fees, maintenance of blocked property and — most relevant commercially — wind-down periods after a designation, during which pre-existing transactions may be completed. OFAC publishes its general licences on its website and codifies many of them in the programme regulations; OFSI publishes its own; EU regulations contain derogations that member-state authorities apply by individual authorisation. Yes, a general licence can be withdrawn. It is not a right and creates no vested entitlement. It may carry an expiry date, it may be amended, and it may be revoked before its stated expiry. OFAC has done all three, on occasion within weeks of issue, and Russia-related licences in particular have been renewed for short periods and then allowed to lapse. A transaction structured on the assumption that the licence will last for its full stated term carries the risk that it will not. The practical consequence is for contracts. Where a transaction’s duration exceeds the life of the authorisation it depends on — a letter of credit, a voyage, an instalment schedule — the contract has to address what happens if the authorisation is withdrawn mid-way: who bears the cost, whether performance is suspended or terminated, and how funds already in transit are treated. A sanctions clause that only covers designation of a party does not cover this. Sources: 31 CFR 501.801; OFAC General Licenses pages; OFSI General Licences; Council Regulation (EU) 269/2014, arts. 4–6.
The cargo is not blocked because the vessel is. But the vessel is blocked property — it is identified on the SDN List by name and IMO number — and almost every step needed to get the cargo off it (paying freight, instructing the master, arranging discharge, dealing with the manager) is a transaction involving that property. For a US person these steps are prohibited without authorisation. For a non-US cargo owner the prohibition may not apply directly, but the port, the terminal, the agent, the bank and the insurer will each apply it. The first question is whether an authorisation exists. When vessels are designated, OFAC frequently issues a time-limited general licence permitting the discharge of cargo loaded before the designation, sometimes limited to specific ports or a specific date. If the cargo falls within it, discharge can proceed within the window, with the documentation to show it did. If there is no general licence, or the cargo falls outside its terms, a specific licence application is the route, and it has to be made quickly, because the licence — if granted — will itself carry a deadline. In parallel, the contractual position has to be established: what the charter party’s sanctions clause provides, whether the bill of lading gives the cargo owner a right to demand discharge at an alternative port, what the cargo insurer’s and the P&I club’s positions are, and who bears the cost of deviation, storage and demurrage. These are usually the larger financial questions. What does not work is waiting. Wind-down authorisations are measured in weeks, ports become reluctant to receive the vessel, and a cargo that has been on a blocked vessel for months is harder to deal with than one discharged in the first week. Sources: 31 CFR 501.801; OFAC Sanctions Advisory for the Maritime Industry (May 2020); BIMCO Sanctions Clause for Time and Voyage Charter Parties.
There is no fixed period. The procedure under 31 CFR 501.807 allows a designated person, or the owner of designated property such as a vessel, to petition OFAC for removal. Neither the regulation nor OFAC’s guidance sets a deadline for a decision. In practice the process runs from several months to well over a year, and longer cases are not unusual. The length is driven by the exchange that follows the petition. OFAC typically responds with a questionnaire, sometimes several rounds, addressed to the facts on which the designation rests: ownership, management, the transactions at issue, what has changed since. The time between rounds is largely in OFAC’s hands; the time within each round is in the petitioner’s. Petitions that are complete, documented and internally consistent from the outset tend to move faster than those supplemented piece by piece. Since 29 June 2026, petitions are submitted through OFAC’s online Reconsideration Portal. OFAC has stated that it aims to complete an initial review and issue a petition identifier within seven to ten business days, and the portal allows a petitioner to request a limited set of unclassified, non-privileged documents underlying the designation. The portal has not changed the standard — the petitioner must still show that the designation rests on an insufficient basis or that circumstances have materially changed — and it has not introduced a deadline for the decision itself. EU and UK listings have their own procedures and their own clocks: a request to the Council and, within two months of listing, an action for annulment before the General Court; in the United Kingdom, a ministerial review followed by court review under the Sanctions and Anti-Money Laundering Act 2018. A party listed by more than one authority runs these in parallel. Two points follow. The commercial measures described in the other answers — banking, insurance, contracts — cannot wait for the outcome and have to be managed throughout. And the documentation assembled in the first weeks after designation is the material the petition will be built from, which is why the reconsideration file starts on the day of listing, not months later. Sources: 31 CFR 501.807; OFAC Reconsideration Portal guidance (June 2026); Council Regulation (EU) 269/2014, art. 14; Sanctions and Anti-Money Laundering Act 2018, ss. 23 and 38.
Not by itself. Removal ends the legal prohibition: the party’s property is no longer blocked and dealings with it are no longer prohibited. It does not oblige any bank, insurer or counterparty to resume a relationship it chose to end, and most do not do so automatically. There are practical reasons for the lag. Commercial screening vendors update their databases from the official lists, but historical records, adverse-media entries and previous alerts remain in the systems of banks that used them. A name that generated a hit for two years continues to generate a review after the entry is removed. Correspondent banks apply their own risk appetite, and a recently delisted customer sits close to the edge of it. Some institutions have internal policies requiring a waiting period after delisting before a relationship can be reopened. Restoring relationships is therefore active work. The removal has to be evidenced — OFAC’s Recent Actions notice, the Federal Register entry where there is one, the updated list — and communicated to each counterparty with a request for a documented decision. Where the removal was by one authority and the party remains listed by another, the position has to be explained rather than assumed to be understood. The compliance programme that was in place during the listing period is part of what a bank will ask to see. For planning purposes, the period after removal should be treated as a second phase of the matter rather than its end. Sources: 31 CFR 501.807(b)(3); OFAC Recent Actions; Federal Register notices of removal.
The answer depends on which regime applies and on the company’s status under Turkish law; the periods overlap and the longest governs. Under US regulations, 31 CFR 501.601 requires every person engaging in a transaction subject to OFAC regulation to keep a full and accurate record of it for ten years. The period was extended from five to ten years with effect from 12 March 2025, following the extension of the statute of limitations for sanctions violations to ten years in April 2024. Records of blocked property must be kept for as long as the property remains blocked and for ten years after it is unblocked. The obligation attaches to the transaction, not to the nationality of the record-keeper. In Türkiye, every company must retain its commercial books, inventories, financial statements and business correspondence for ten years under article 82 of the Turkish Commercial Code. Obliged parties under Law No. 5549 — banks, financial institutions and the other categories listed in article 2(1)(d) — must in addition keep the documents and records generated by their anti-money-laundering obligations for eight years, counted from the date of the document, the date of the last entry for books, and the date of the last transaction for identification documents (Law No. 5549, article 8). Asset-freeze decisions under Laws No. 6415 and 7262 carry their own notification duties towards MASAK, which is responsible for their implementation (Law No. 6415, article 12). EU and UK regulations set their own reporting and retention requirements, which vary by programme; where a transaction touches those regimes, the relevant regulation has to be checked rather than assumed to follow the US period. What matters as much as the period is the content. A record that shows the transaction took place is not the same as a record that shows the screening done before it, the ownership analysis that supported it, the authorisation it relied on and the decision that cleared it. It is the second kind that is examined when a question is asked years later. Sources: 31 CFR 501.601; Federal Register, 13 September 2024 and 21 March 2025; Turkish Commercial Code No. 6102, art. 82; Law No. 5549, arts. 2 and 8; Law No. 6415, art. 12.
For most companies, no. Turkish law requires a formal compliance programme only from obliged parties under Law No. 5549. Article 2(1)(d) lists them by sector: those active in banking, insurance, private pensions, capital markets, lending and other financial services, postal and transport services, and games of chance and betting; dealers and intermediaries in foreign exchange, real estate, precious stones and metals, jewellery, vehicles, construction machinery, historical artefacts, works of art and antiques; notaries; sports clubs; independent lawyers within defined limits; and other areas determined by the President. Among these, article 4 of the Compliance Programme Regulation requires a full programme — a compliance officer, written policies, risk management, monitoring, training and internal audit — from banks (other than the central bank and development and investment banks), capital-markets intermediaries and portfolio management companies, insurance and pension companies, financing, factoring and leasing companies, payment and electronic-money institutions, Group A authorised exchange institutions, precious-metals intermediaries, crypto-asset service providers (added in December 2024) and the postal operator for its banking activities; the remaining obliged parties carry customer due diligence, suspicious-transaction reporting and record-keeping duties without a full programme. A trading, shipping or manufacturing company that is not an obliged party has no equivalent statutory duty. Two obligations nonetheless apply to everyone. Asset-freeze decisions implementing UN Security Council resolutions, under Laws No. 6415 and 7262, bind every person in Türkiye, and dealing with frozen assets is a criminal offence regardless of whether the company has a programme. And the duty of care of company directors under article 369 of the Turkish Commercial Code extends to foreseeable regulatory risk, which sanctions exposure now is for any company trading internationally. Outside Turkish law, the pressure is contractual and evidential. Correspondent banks, insurers and larger counterparties ask for a programme as a condition of the relationship. Where a question is later raised by a foreign authority, the existence and quality of a programme is treated as a significant factor: OFAC’s 2019 Framework for Compliance Commitments describes the five elements it looks for, and its Enforcement Guidelines treat the absence of a programme as aggravating and the presence of an effective one as mitigating. EU parent companies are now required to undertake best efforts to ensure that their third-country subsidiaries do not undermine EU sanctions, which reaches Turkish subsidiaries of EU groups directly. The practical position is therefore that a programme is not legally required of most Turkish companies, but a company with international exposure will be asked for one, and will be judged on whether it operated rather than on whether it existed on paper. Sources: Law No. 5549, arts. 2 and 5; Compliance Programme Regulation, art. 4 (Official Gazette 16 September 2008, as amended, most recently 25 December 2024); Laws No. 6415 and 7262; Turkish Commercial Code, art. 369; OFAC, A Framework for OFAC Compliance Commitments (May 2019); 31 CFR Part 501, Appendix A; Council Regulation (EU) 833/2014, art. 8a. These answers describe how the instruments operate.
These answers describe how the instruments operate. They are general information and do not constitute legal advice.