EO 14024 Russian Sanctions: 50% Rule, Blocks, and Penalties

Executive Order 14024, signed on April 15, 2021, gives the U.S. government authority to freeze the assets of individuals and entities tied to harmful activities carried out by or on behalf of the Russian government. The EO 14024 Russian sanctions program reaches far beyond Kremlin officials: it captures companies operating in designated sectors of the Russian economy, financiers and suppliers who support sanctioned activity, and even adult family members of blocked persons. Any U.S. citizen, U.S. company, or person inside the United States must freeze property belonging to a designated party and stop transacting with them, and violations carry civil penalties up to $377,700 per transaction and criminal penalties up to $1 million and 20 years in prison.

Who Can Be Designated

The order lists several categories of conduct that can trigger sanctions: election interference and attacks on democratic institutions, malicious cyber activity, transnational corruption, extraterritorial operations against dissidents and journalists, and actions undermining the peace or territorial integrity of countries important to U.S. national security.¹ You do not have to be a Russian official to be designated. Anyone who facilitates, finances, or provides meaningful support for these activities can be sanctioned.

Sectoral Designations

The Secretary of the Treasury can designate any person operating in a sector of the Russian economy identified as supporting the government’s harmful activities. Operating in the sector is enough; the company does not need to be engaged in any of the harmful conduct itself. As of early 2025, the identified sectors include technology and electronics, defense and related materials, financial services, aerospace, marine, accounting and trust and corporate formation services, management consulting, quantum computing, metals and mining, architecture and engineering and construction, manufacturing, transportation, and energy, which was added in January 2025.²

Facilitators, Suppliers, and Family Members

Anyone providing meaningful financial, material, or technological support to a designated person, or to the harmful activities the order targets, can themselves be designated. Financiers, intermediaries, logistics providers, and technology suppliers all fall within reach even without any formal government role.³

The order also authorizes designation of the spouse or adult children of a blocked person. Family members can be designated because of the relationship alone; they do not need to have personally participated in anything. The U.S. government has used this to sanction relatives who benefit from or help shelter the wealth of Russian elites.³

The 50 Percent Rule: Blocked Without Being Listed

A company can be blocked under this order even if its name never appears on any OFAC list. Under OFAC’s 50 Percent Rule, any entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself treated as blocked property. Ownership interests of multiple blocked persons add together. If Blocked Person A owns 30 percent and Blocked Person B owns 25 percent, the company is blocked because the combined interest exceeds 50 percent.⁴

The rule counts ownership by persons blocked under any OFAC program, not just this one, and the regulation implementing EO 14024 restates the rule specifically for the Russia framework.⁵

One limit is important. The 50 Percent Rule looks at ownership only, not control. If a blocked person controls a company through board seats or contract but owns less than half, the entity is not automatically blocked, though OFAC can still designate it separately.⁴

What a Property Block Actually Does

When a person or entity is designated, all of their property and interests in property within the United States, that later enter the United States, or that are held anywhere in the world by a U.S. person, are immediately frozen.⁵

A block is a freeze, not a confiscation. Legal title stays with the designated party, but every right to access, transfer, withdraw, or use the assets is suspended until the sanctions are lifted. In practice the funds sit in blocked accounts at U.S. financial institutions, untouchable by the owner.

The prohibition reaches beyond bank accounts. No U.S. person may send funds, deliver goods, or provide services to or for the benefit of a blocked person, and receiving anything from a blocked person is equally prohibited.⁵ Transactions designed to evade these prohibitions are also banned, including routing payments through intermediaries, restructuring ownership to slip below the 50 percent threshold, or using non-U.S. persons as fronts.

Who Has to Comply

Compliance obligations attach to every U.S. person. That category includes U.S. citizens, lawful permanent residents, entities organized under U.S. law and their foreign branches, and anyone physically present in the United States.⁵ If you fall into any of those categories, you must stop transactions with a designated party and freeze any of their property you hold or control.

Foreign Banks Are Not Off the Hook

Executive Order 14114, signed in December 2023, amended EO 14024 to extend sanctions risk to non-U.S. banks. A foreign financial institution can be sanctioned if it conducts or facilitates significant transactions on behalf of persons designated for operating in sectors that support Russia’s military-industrial base, such as technology, defense, construction, aerospace, and manufacturing. It can also be sanctioned for significant transactions involving that military-industrial base more broadly, including supplying restricted items to Russia.⁶

The consequences are severe. OFAC can prohibit the foreign bank from opening or maintaining correspondent accounts in the United States, or block it outright. Either outcome cuts the bank off from the dollar-based financial system, even for activity that occurs entirely outside the United States.⁶

Penalties for Violations

Sanctions violations under EO 14024 are enforced under the International Emergency Economic Powers Act, with civil and criminal tracks.

Civil penalties can reach up to $377,700 per violation or twice the value of the underlying transaction, whichever is greater.⁷ The “twice the transaction” formula means a single large prohibited payment can generate a penalty in the tens of millions. Civil liability does not require proof of intent; negligent compliance failures can be enough.

Criminal penalties apply to willful violations. A conviction can bring a fine of up to $1,000,000 and, for individuals, up to 20 years in prison, and the two can be imposed together.⁸ Attempts and conspiracies carry the same maximum penalties as completed violations.

When OFAC investigates, the strength of the organization’s compliance program influences both the decision to pursue penalties and the amount. Having a documented risk-based program in place before something goes wrong is the most effective way to limit exposure.⁹

Reporting Blocked Property

If you block property under this order, you must file an initial report with OFAC within 10 business days. After that, anyone still holding blocked property as of June 30 must file an annual report by September 30 each year, submitted electronically through OFAC’s Reporting System. Each report must identify the sanctions target, describe the property, give the date of blocking, and state the U.S. dollar value.¹⁰

Financial institutions holding blocked funds in combined accounts must break out each blocked asset individually. Property with a negative balance, such as an outstanding loan, is reported at zero value with a narrative explanation.

When a Transaction Is Allowed: Licenses

Not every transaction with a blocked person is permanently off limits. OFAC authorizes activity through two license types.

A general license is a blanket authorization published by OFAC. If it covers your situation, you can proceed under its terms without applying. OFAC has issued dozens of general licenses under the Russia program, covering activities such as wind-down transactions for companies exiting Russian markets, diplomatic mission operations, and certain energy-related payments.²

A specific license is an individual authorization granted to a particular applicant for a particular transaction. You apply through OFAC’s online Application Portal and explain why the transaction should be permitted.¹¹ Specific licenses handle situations no general license covers, such as releasing blocked funds for humanitarian reasons or winding down a unique business relationship. OFAC reviews these case by case, and approval is not guaranteed.

Getting Off the SDN List

A person or entity designated under EO 14024 can petition OFAC for removal through an administrative reconsideration process. The petition goes to OFAC’s designated reconsideration address by email and should explain why the listing was incorrect or why the circumstances that led to it no longer apply.¹²

OFAC has identified several situations that could support a successful petition: a demonstrable change in behavior, evidence that the basis for designation no longer exists, proof of mistaken identity, or the death of the designated person.¹³ A designated entity can also propose remedial steps such as corporate reorganization or the resignation of sanctioned individuals from leadership. The petitioner can request a meeting with OFAC, but the agency is not required to grant one.

OFAC issues a written decision. If denied, you can reapply, but submitting the same arguments without new evidence will bring another denial.¹³ Removal from the SDN List is difficult and slow in practice. Most successful petitions involve a genuine, verifiable change in the conduct or ownership structure that triggered the designation.

Before transacting with any counterparty tied to Russia, check the name and its owners against OFAC’s Sanctions List Search tool, and remember that a clean search result does not settle the question when the 50 Percent Rule may apply.¹⁴

1
Federal Register. Russian Harmful Foreign Activities Sanctions Regulations
2
U.S. Department of the Treasury. Russian Harmful Foreign Activities Sanctions
3
United States Department of State. Targeting Elites of the Russian Federation
4
Office of Foreign Assets Control. Entities Owned by Blocked Persons (50% Rule)
5
eCFR. 31 CFR Part 587 – Russian Harmful Foreign Activities Sanctions Regulations
6
Office of Foreign Assets Control. How Does Executive Order 14114 Amend EO 14024
7
eCFR. 31 CFR 578.701 – Penalties
8
Office of the Law Revision Counsel. 50 USC 1705 – Penalties
9
U.S. Department of the Treasury. A Framework for OFAC Compliance Commitments
10
eCFR. 31 CFR 501.603 – Reports of Blocked, Unblocked, or Transferred Blocked Property
11
Office of Foreign Assets Control. OFAC Specific Licenses and Interpretive Guidance
12
eCFR. 31 CFR 501.807 – Procedures Governing Delisting From the Specially Designated Nationals and Blocked Persons List
13
Office of Foreign Assets Control. Filing a Petition for Removal From an OFAC List
14
U.S. Department of the Treasury. Sanctions List Search