The United States imposes economic and trade sanctions on individuals, entities, and jurisdictions throughout the world based on US foreign policy and national security goals. These measures are implemented primarily by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) through a combination of statutes, regulations, executive orders, and interpretive guidance. The US Departments of State, Commerce, and Defense also play significant roles. Importantly, the Department of Commerce, Bureau of Industry and Security (BIS) administers licensing for the export of goods, software, and technology under some sanctions programs pursuant to the Export Administration Regulations (EAR).
Sanctions generally prohibit engaging in transactions with sanctioned individuals, entities, governments, or government entities. Comprehensive sanctions, also called an embargo, generally prohibit all trade with a specific country or region. Currently, the US maintains comprehensive sanctions against Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine. The US also maintains significant sanctions programs against Russia and Venezuela. Finally, the US maintains targeted sanctions programs against specific individuals and entities.
Sanctions can generally be divided into two categories: so-called “primary” sanctions and “secondary” sanctions. Primary sanctions apply to US persons or in situations where there is a US nexus, such as involvement by a US person, US-originating goods, or a transaction taking place within the US. Secondary sanctions authorize OFAC or the State Department to threaten sanctions on a person, including a non-US person, for specified activity. These sanctions are intended to discourage non-US persons from engaging in certain transactions even if the transaction has no US nexus (and is thus not subject to primary sanctions).
Sanctions are a strict liability regime. While the fact of a violation (without proof of fault or intent) results in civil liability, OFAC does take fault and intent into consideration when deciding on the penalty to be imposed. For more, see the OFAC Principles of Enforcement topic in the Sanctions Enforcement section. Persons and entities face criminal liability for “willful” violations, attempts to violate, conspiracies to violate, or causing a violation of, any license, order, regulation or prohibition under US law. Potential penalties include imprisonment and monetary fines.1
1 50 USC § 1705.