SDN List (Specially Designated Nationals List)

The SDN List, formally the Specially Designated Nationals and Blocked Persons List, is a list maintained by the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury. It names individuals, companies, organizations, vessels and aircraft whose property and interests in property within US jurisdiction are blocked, and with whom US persons are generally prohibited from dealing. It is the best-known instrument of US economic sanctions, but it is only one part of them.

Listed parties are often called SDNs. They include people and entities linked to sanctioned governments, terrorists, narcotics traffickers, weapons proliferators, cyber criminals, human-rights abusers and others targeted under specific sanctions programs.

Most designations rest on presidential executive orders issued under the International Emergency Economic Powers Act (IEEPA) of 1977, and some on other statutes such as the Trading with the Enemy Act, the Foreign Narcotics Kingpin Designation Act and country-specific sanctions laws. Each entry on the list carries one or more program tags, such as [SDGT] for Specially Designated Global Terrorists, which identify the legal authority for the designation. The general framework of OFAC sanctions applies to US persons: US citizens and permanent residents wherever located, entities organized in the United States and their foreign branches, and anyone in the United States.

When a party is added to the SDN List, any of its property that is in the United States or in the possession or control of a US person is frozen. The US person may not transfer, pay out, withdraw or otherwise deal in that property without an OFAC license. Banks must hold blocked funds in an interest-bearing blocked account and report the blocking to OFAC within 10 business days. Transactions that are prohibited but involve no blocked property, for example a payment that would benefit an SDN but is stopped before funds arrive, must be rejected and also reported.

The 50 Percent Rule

Under OFAC's 50 Percent Rule, any entity owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons is itself blocked, even if it does not appear on the list. Screening against names alone is therefore not enough: firms must understand ownership structures, using ultimate beneficial owner information gathered during due diligence.

Financial institutions, payment companies and many non-financial businesses screen customers, counterparties and payment messages against the list as part of sanctions screening. Wire transfers are screened in real time across all parties in the message, including intermediaries and free-text fields. Crypto businesses also screen blockchain addresses, which OFAC has included in some SDN entries since 2018, often using blockchain analytics tools.

OFAC sanctions carry civil liability on a strict-liability basis, meaning a US person can be penalized for a violation even without knowing that a party was listed. OFAC's enforcement guidelines treat the existence of a risk-based compliance program as a mitigating factor. Willful violations can lead to criminal prosecution.

The SDN List does not capture every US sanctions restriction. OFAC also publishes non-SDN lists, gathered in its Consolidated Sanctions List, such as the Sectoral Sanctions Identifications List, which impose narrower prohibitions rather than full blocking. Comprehensive embargoes on certain countries and regions prohibit most dealings with anyone there, listed or not. Other agencies maintain separate lists, such as the Commerce Department's Entity List for export controls. Non-US firms face secondary sanctions risk when they deal with SDNs in certain programs, even without a US nexus. A clean screening result against the SDN List is therefore a starting point, not proof of compliance.

A listed party may petition OFAC for removal by showing that the basis for designation no longer applies, for example because ownership or conduct has changed. OFAC publishes additions, removals and amendments as they happen, and updates can occur several times a week. For the agency itself, see the OFAC regulator profile; reporting of suspicious activity connected with sanctions evasion also involves FinCEN. Concerns about over-broad screening contribute to de-risking of entire regions.

• Office of Foreign Assets Control
• OFAC Sanctions List Search