U.S. Sanctions Against Russia
Legal Guidance & Compliance | New York Attorney

Before the doctrine, the exposure. Sanctions risk enters ordinary business life through channels most people never think to check: a new customer, a foreign supplier, a payment routed in dollars, an investment abroad, a portfolio holding, a charitable gift. Because liability does not depend on intent, the danger is rarely a deliberate violation — it is an unscreened counterparty, an unmapped ownership chain, or an assumption that yesterday's clearance still holds today.

 

A. THE THREE FEATURES THAT MAKE COMPLIANCE UNFORGIVING

Three doctrines give this body of law its severity, and together they explain why proactive screening is not optional overhead.

First, strict liability. For civil violations, OFAC need not prove that you intended to break the law — if a prohibited transaction occurs, a violation exists as a matter of law. A robust compliance program can mitigate penalties, but it is not a legal defense; willful conduct can be referred to the Department of Justice for criminal prosecution.
 

Second, the absence of a de minimis threshold. There is no dollar floor below which a transaction becomes lawful. A small wire, an overlooked email referral, or a minor consulting invoice touching a blocked party can trigger liability.
 

Third, the Fifty Percent Rule. An entity is itself blocked if it is owned, directly or indirectly and in the aggregate, fifty percent or more by one or more blocked persons — even if that entity appears on no list by name. This is the single most common source of inadvertent exposure, because it means checking a name against a database is never enough. OFAC expects "look-through" due diligence on ultimate beneficial ownership before you onboard or transact.

 

B. THE FOUR TYPES OF SANCTIONS — AND WHY RUSSIA IS NOT OFF-LIMITS

Not all sanctions work the same way, and the single most important thing to understand is that they differ in how you identify what is prohibited. Some sanctions come with a published list of names; others do not, and require you to make the judgment yourself. Grasping which is which is the difference between confident, compliant business and either a costly violation or the needless abandonment of legitimate opportunity.
 

Personal (targeted) sanctions — there is a list. These are directed at specific, named persons and entities. The primary tool is the SDN List, which identifies the parties whose property must be frozen and with whom U.S. persons may not deal. Because the targets are named, screening against the published list is the front-line control. The complication is the Fifty Percent Rule: an entity owned 50% or more by listed persons is blocked even though it is not itself named, so a clean list-hit is necessary but not sufficient — you must still trace ownership.
 

Sectoral sanctions — there is a list, but it prohibits only certain activities. These target named parties through the SSI List, but they do not freeze all dealings. Instead they prohibit specific activities — for example, transacting in certain new debt or equity of designated Russian financial and energy firms, subject to maturity limits, or supporting specified oil-exploration projects. Here the list tells you who, but you must still qualify what you are doing against the applicable directive. An SSI-listed company is a lawful counterparty for many purposes and a prohibited one for others.
 

Regional (geographic) sanctions — there is no list; you must qualify the location yourself. These attach to territory rather than to named persons. Dealings connected to comprehensively embargoed regions — Crimea, and specified areas of the Donetsk, Luhansk, Kherson, and Zaporizhzhia regions — are broadly prohibited regardless of who the counterparty is. There is no roster of forbidden names to screen against; the burden is on you to determine where a counterparty is located, where goods or services will be delivered or used, and whether any part of the transaction touches an embargoed area.
 

Country-wide sanctions (embargo) — the whole country is off-limits. A comprehensive country embargo prohibits substantially all dealings with an entire nation (as with Cuba, Iran, North Korea, and Syria). This is the point every Russia-facing client should understand: the Russian Federation as a whole is not under a comprehensive U.S. embargo. You are not categorically barred from doing business with or in Russia. What exists instead is a dense layer of targeted, sectoral, and regional restrictions — plus specific prohibitions on certain services, exports, imports, and new investment — that you must navigate transaction by transaction. Many businesses, deterred by the complexity and the severity of the penalties, cut off all Russian contact reflexively; that is a business decision, not a legal requirement, and it often forfeits lawful opportunity. The correct response is not blanket avoidance but disciplined qualification: screening the parties, mapping the ownership, checking the geography, and confirming that the specific activity is permitted or licensed.
 

The list-vs.-no-list distinction, in short. Personal and sectoral sanctions give you a published list to screen against (though the Fifty Percent Rule and the activity-specific directives mean the list is a starting point, not the whole analysis). Regional and country-wide sanctions give you no list of names — the prohibition turns on facts you must establish yourself, chiefly location and the nature of the activity. Most compliance failures happen at the seams: treating a sectoral counterparty as unrestricted, missing an entity blocked only through ownership, or failing to check whether a transaction reaches into an embargoed region.

 

C. WHO ADMINISTERS THE SANCTIONS

The program is administered and enforced primarily by the Office of Foreign Assets Control (OFAC) within the U.S. Department of the Treasury. OFAC maintains the sanctions lists, issues the licenses that authorize otherwise-prohibited activity, and brings the enforcement actions. The Russia-related regime is the most operationally intricate country program OFAC has ever run, and it changes continually — which is itself a compliance risk, since references to the regulations always point to their current, amended versions.

 

D. THE LEGAL ARCHITECTURE, IN BRIEF

The regime rests on several reinforcing layers of authority. The International Emergency Economic Powers Act (IEEPA) (50 U.S.C. §§ 1701–1706) is the foundational statute, allowing the President, upon declaring a national emergency, to block property and prohibit transactions. The Countering America's Adversaries Through Sanctions Act (CAATSA) codified key Russia-related orders into statute and expanded secondary-sanctions tools. Executive Orders — notably E.O. 14024 (the primary blocking authority) and E.O. 14114 (targeting foreign financial institutions supporting Russia's military-industrial base) — supply the operative mandates. These are implemented through 31 C.F.R. Part 587 (Russian Harmful Foreign Activities Sanctions Regulations) and 31 C.F.R. Part 589 (Ukraine-/Russia-Related Sanctions Regulations).