OFAC Non SDN Sanction List

OFAC Non SDN Sanction
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The Office of Foreign Assets Control (OFAC) Non SDN Sanction List is a reference tool that is published by the United States Department of Treasury to identify persons subject to specific types of sanctions.  This list includes non-blocking prohibitions of the export specific goods and services and prohibitions based on statutory exceptions for imports.  The list also controls prohibition of investments.

The SDN list is not a part of other OFAC sanction lists enumerated in the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List) or the Specially Designated National and Blocked Person (SDN List).  To address this the OFAC has created the Consolidated Sanctions List to ease the burden placed upon organizations conducting business internationally. 

Chinese Military and Surveillance Technology Sectors

The Non SDN List includes entities determined to be involved in the military and surveillance technologies at the behest of the People’s Republic of China.  These actions were initiated during the Trump administration and are being actively continued in the Biden administration.  As a result of these changes, the authority for identifying these parties has been moved from the Department of Defense (DoD) to the OFAC.

Parties particular to China are listed in the Non-SDN Communist Chines Military Companies List (NS-CMIC List).  This list has replaced the Non-SDN Communist Chinese Military Companies List previously on the OFAC website.  

Russian Related Designations

Russian entities listed under these sanctions also continue to grow as a result of that country’s hostilities against Ukraine.  These entities may appear in other countries allied with the Russian efforts such as Belarus.  It is important to understand that these lists are updated on a regular basis and that information on parties from previous transactions should be screened against latest information before engaging in new business.

Penalties for Noncompliance

The U.S. Government maintains sanctions to support the United States national security and foreign policy objectives.  These sanctions are often in effect regardless of an item or service’s export regulation classification.  Conducting an activity that results in the sale or transfer of an item, service, or information to a denied party or entity can result in civil fines, criminal fines, and imprisonment.

Export sanctions are enforced by the Department of Treasury’s Office of Foreign Assets Control (OFAC).   There are numerous penalties based on the relevant statue under which violations may have occurred.  These penalties are adjusted for inflation annually.  Recent penalties from the OFAC include a $30,000,000 settlement, from Wells Fargo.

Growing Burden on International Businesses

Actions taken by the United States are also being instituted by its allies including the European Union, United Kingdom, Australia, New Zealand and others.  This makes identification of parties involved in transactions more important than ever.  While many organizations have actively engaged in active Export Compliance Programs, they often have not actively incorporated denied party screening into their processes.

To learn more about Denied Party Screening click on this link to download a whitepaper about this important activity.

CVG Strategy Export Compliance Management Programs

Export Compliance is an important subject for businesses engaged in sales of items that are intended for international sales or could result in international sales.  Failure to comply with regulations can result in criminal prosecution including imprisonment and fines.  It can also result in civil penalties and disbarment from export activities.  Your business cannot afford to have its reputation ruined by a failure to comply.

Our Export Compliance Management Programs include procedures that address lists checks, including the OFAC Non SDN Sanction Lists to help your organization maintain due diligence.   We can also perform export control classifications, perform audits, and educate your team.  Regardless of whether your business falls under EAR or ITAR, CVG Strategy has the expertise to help you remain compliant.  

Kevin Gholston

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