Secondary Sanctions: What They Are, Who They Target and What to Screen

What are secondary sanctions and how do they differ from primary sanctions?

US secondary sanctions can target non-US persons for their dealings with sanctioned parties or for other sanctionable activities, even where no US person and no US nexus is involved. Primary sanctions, by contrast, apply to the persons and entities of the jurisdiction that issues them and to conduct with a connection to it. For the United States that means US persons, which covers US citizens and permanent residents wherever they are, individuals and entities within the United States and entities organised under US law, including their foreign branches.

For the United States, primary sanctions also cover conduct with a US nexus, such as a payment that clears through a US financial institution. A non-US company is generally not directly bound by US sanctions, although non-US persons can come within OFAC's scope in several ways, for example where a transaction involves US-origin goods (Tri-Seal Compliance Note of March 2024). Certain programs also extend restrictions to foreign entities owned or controlled by US persons or impose requirements concerning the reexport of certain US-origin goods, technology or services.

Secondary sanctions do not extend direct jurisdiction for the imposition of sanctions over non-US persons. They attach consequences to their dealings with sanctioned parties instead. A non-US person is affected by those consequences through its access to the United States rather than in its home jurisdiction. If a non-US bank knowingly facilitates significant transactions for a sanctioned Iranian bank and no US nexus is involved, the United States generally does not treat the transaction itself as a violation of US law. It can instead restrict the bank's access to the US financial system. OFAC uses the term, for example in its alert of 5 October 2026 to foreign financial institutions conducting business with Iran. The SDN List marks certain entries with the notation "Subject to Secondary Sanctions" (FAQ 636).

How do secondary sanctions work?

The consequences range from a menu-based restriction to a restriction on US correspondent banking accounts and, at the extreme, full blocking sanctions accompanied by designation on the SDN List. Each level generally corresponds to an OFAC list, which is what makes the exposure visible in screening.

Menu-based sanctions allow US authorities to select measures from a predefined list, subject to the requirements of the applicable sanctions provision. For example, several statutes, among them section 235 of the Countering America's Adversaries Through Sanctions Act (CAATSA), allow the President to apply one or more measures from a menu to a non-US person without blocking it. OFAC records those measures on the Non-SDN Menu-Based Sanctions (NS-MBS) List. One menu item, for example, generally limits the loans or credit that a US financial institution may extend to the listed person to $10,000,000 in any 12-month period (FAQ 870).

Another mechanism restricts foreign financial institutions' access to US correspondent or payable-through accounts. Where the Treasury Department determines that an institution meets the criteria under the applicable sanctions authority, it may prohibit the opening or maintenance of those accounts or impose strict conditions. The criteria vary by program and may include knowingly conducting or facilitating significant transactions (FAQ 156). Institutions subject to a prohibition or to strict conditions appear on the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (CAPTA List) (Other OFAC Sanctions Lists).

The most severe measure is a full blocking sanction. OFAC can designate a non-US person to the SDN List for its dealings with sanctioned parties or for other sanctionable activities meeting the relevant designation criteria. From that point its property and interests in property within the United States or within the possession or control of US persons are blocked. US persons are generally prohibited from dealing with it. For how designation and blocking work in detail, see The OFAC SDN List and The OFAC Sanctions Lists.

Which programs carry secondary sanctions risk?

US secondary sanctions arise under several sanctions programs, including Iran, Russia, North Korea and Cuba. The programs differ in scope, in the counterparties involved and in the applicable legal authority. Dealings with a sanctioned person do not automatically trigger secondary sanctions in every case.

Iran

The Iran program includes extensive secondary sanctions authorities. On 24 August 2026 the Treasury Department announced Operation Economic Outcast. Under Executive Order 13902 it extended secondary sanctions exposure to any person, wherever located, that operates in or provides services in support of Iran's digital assets, technology, gold, aviation or shipping sectors. In an alert of 5 October 2026, OFAC stated that foreign financial institutions still transacting with sanctioned Iranian financial institutions "could be targeted at any time without advance notification".

Russia

Non-US persons may face sanctions for specified support for sanctioned Russian persons or other covered activities. Foreign financial institutions may also face blocking sanctions or restrictions on US correspondent or payable-through accounts. The applicable exposure depends on the relevant authority and any waivers, exceptions or authorisations in force.

Cuba

The Cuba program includes authorities targeting foreign persons involved in specified Cuba-related activities. Foreign financial institutions may also face restrictions on US correspondent or payable-through accounts, or blocking sanctions, for conducting or facilitating significant transactions for or on behalf of persons blocked under Executive Order 14404 of May 2026.

Do the EU and UK have secondary sanctions?

Neither the European Union nor the United Kingdom currently operates a secondary sanctions regime comparable to the US one. EU and UK measures apply within the scope each regulation sets out. Both can target third-country persons and entities for supporting sanctioned activities or facilitating sanctions circumvention. The resulting prohibitions generally bind persons within the jurisdictional scope of the relevant EU or UK rules.

EU sanctions generally apply within the Union, to member-state nationals wherever located and to entities incorporated or constituted under member-state law. They also commonly apply aboard aircraft and vessels under member-state jurisdiction and to legal persons in respect of business done wholly or partly within the Union. UK sanctions generally apply to conduct within the United Kingdom and to UK nationals and entities established under UK law wherever they operate. The precise scope depends on the applicable legislation.

The European Commission's position is that the EU "does not recognise the extra-territorial application of laws adopted by third countries". Council Regulation (EC) No 2271/96 (the Blocking Statute) gives that position legal force. It prohibits EU operators from complying with the US measures listed in its Annex, which currently concern Cuba and Iran, unless the Commission authorises compliance. The United Kingdom retained the regulation in its domestic law after leaving the Union.

For an EU operator, US secondary exposure and the Blocking Statute can create conflicting pressures. How to resolve that is a legal question for each case. For the EU framework as a whole, see EU Sanctions.

What secondary sanctions mean for screening

A firm without US business may still need to screen against OFAC lists. Secondary sanctions exposure generally arises from the status of its counterparties and the nature of its dealings rather than from the firm's own location. Several OFAC lists are relevant to that risk, chiefly the SDN List with its entries marked as subject to secondary sanctions, the NS-MBS List and the CAPTA List. OFAC publishes the non-SDN lists together in its Consolidated Sanctions List. A process that covers only the SDN List will not identify entries recorded on the other lists.

Under OFAC's 50 Percent Rule, an entity owned 50 percent or more, directly or indirectly, individually or in aggregate, by one or more blocked persons is itself blocked, even if it never appears on the SDN List (FAQ 401), which is why ownership-structure checks sit alongside list screening. For the rule in full, see OFAC Sanctions: An Overview.

OFAC updates its lists on no fixed schedule. The Iran alert makes explicit that designations can come without notice. Screening at onboarding therefore tells you who a counterparty was on that day. Re-screening on an ongoing basis is an important part of an effective, risk-based compliance approach.

With dilisense you can search OFAC's SDN and consolidated lists, alongside EU, UN, UK and other sources, through a single API. The data updates hourly and every match is traceable to its origin.

For how screening works step by step, see What is Sanctions Screening?. To check a name against OFAC's lists now, use the free OFAC sanctions list search.