Sanctions
Sanctions
The US Department of Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, individuals, entities and regimes. Unless licensed by Treasury’s Office of Foreign Assets Control (OFAC), goods, technologies or services generally may not be exported, re-exported, sold or supplied, either directly or indirectly, from the United States or by a US person, wherever located, to any sanctioned country, person or entity. These programs get their authority primarily from the International Emergency Economic Powers Act (IEEPA) which, as noted elsewhere, is also the object of litigation related to the Trump Administration’s “reciprocal tariffs.”
Economic sanctions administered by OFAC are classified as either “country-based” or “list-based” programs. Country-based economic sanctions programs prohibit almost all transactions between US persons and the targeted country. The prohibition extends to transactions between US persons and the targeted country’s representatives or state-owned companies, and, in some cases, citizens no matter where located. List-based economic sanctions programs prohibit transactions between US persons and specific individuals and entities allegedly engaged in disfavored activities, including narcotics trafficking, international terrorism and proliferation of weapons of mass destruction. The targets of these programs are designated as “Blocked Persons” and are listed on the “Specially Designated Nationals and Blocked Persons List.”
Authority
IEEPA provides the President with sweeping powers that may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.
Penalties for noncompliance with IEEPA are severe. The maximum civil penalty, per violation, is the greater of $368,136 or twice the value of the transaction. The maximum criminal penalty is a fine of up to $1 million or imprisonment up to 20 years, or both.
