Comprehensive sanctions work by cutting off nearly all trade, financial transactions, and travel-related spending between U.S. persons and an entire sanctioned country. The United States currently maintains comprehensive programs against Cuba, Iran, and North Korea, with sweeping restrictions of similar effect covering Russia and the occupied Ukrainian regions of Crimea, Donetsk, and Luhansk. If you are a U.S. citizen, permanent resident, or business, the default answer to any question that starts with “can I…” involving those countries is no, unless a specific exception says otherwise. Violations can reach $1,000,000 in criminal fines and 20 years in prison per count.
Which Countries Are Covered
Three countries sit under the clearest comprehensive programs: Cuba, Iran, and North Korea. Each program prohibits most transactions involving the country, its government, and persons ordinarily resident there, though the specific rules and available licenses differ by program. North Korea’s restrictions are the most severe. U.S. persons cannot legally travel there without government authorization.
Russia and the occupied Ukrainian regions of Crimea, Donetsk, and Luhansk face restrictions that function much like comprehensive sanctions. The Russia program has expanded through a series of executive orders covering new investment, imports, exports, and financial dealings across multiple sectors.1Office of Foreign Assets Control. Russian Harmful Foreign Activities Sanctions For the covered Ukrainian regions, U.S. persons face prohibitions on new investment, imports, exports, and any financing or facilitation of such transactions.2Office of Foreign Assets Control. Frequently Asked Questions – Covered Regions of Ukraine
What the Prohibitions Actually Cover
The restrictions apply to all U.S. persons, including citizens and permanent residents anywhere in the world, not only to U.S.-based businesses. They fall into three overlapping categories.
Trade
Comprehensive programs impose a near-total ban on importing goods from and exporting goods to the sanctioned country, including technology and services. You generally cannot buy Iranian oil, sell consumer electronics to North Korea, or provide consulting services to a Cuban government entity without OFAC authorization. Indirect transactions count too. Routing goods through a third country to sidestep the embargo is itself a violation.
Finance and Blocked Property
Banking transactions, investments, and wire transfers with the sanctioned country are broadly prohibited. The central mechanism is “blocking,” which OFAC defines as freezing property. When property is blocked, any transfer or dealing with that property is prohibited. Legal title stays with the owner, but exercising ownership rights — withdrawing funds, selling, making payments — requires OFAC authorization.3Office of Foreign Assets Control. Blocked Property Definition
OFAC defines “property” broadly. It covers money, bank accounts, stocks, bonds, debt instruments, real estate, goods, ships, contracts, and any other tangible or intangible asset, including future or contingent interests.3Office of Foreign Assets Control. Blocked Property Definition If a blocked person has any interest in property inside the United States or within a U.S. person’s control, that property must be frozen.
Travel
Travel-related spending is an economic transaction, so comprehensive programs restrict travel even without an explicit travel ban. Spending money on hotels, meals, or transportation in a sanctioned country is generally prohibited. North Korea requires explicit government authorization for U.S. persons to travel there at all. Cuba allows certain categories of travel under general licenses, including educational activities, humanitarian work, and journalistic activity, but tourism is not among them.
The 50 Percent Rule
One of the largest compliance traps is OFAC’s 50 Percent Rule. Any entity owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons is itself treated as blocked, even if that entity never appears on a sanctions list by name.4Office of Foreign Assets Control. Entities Owned by Blocked Persons (50 Percent Rule)
The rule creates hidden exposure. If Blocked Person A owns 25 percent of a company and Blocked Person B owns another 25 percent, that company is blocked because blocked persons collectively own 50 percent or more. It also chains through layers of ownership. If a sanctioned company owns 50 percent of Company X, and Company X owns 50 percent of Company Y, then Company Y is blocked, despite being two steps removed from anyone on a sanctions list.4Office of Foreign Assets Control. Entities Owned by Blocked Persons (50 Percent Rule)
The rule turns on ownership, not control. A company that is controlled but not 50 percent owned by a blocked person is not automatically blocked under this rule, though OFAC can still designate a controlled entity separately.
When You Can Still Transact: Licenses
Comprehensive sanctions are not designed to starve civilian populations, and OFAC maintains humanitarian carve-outs. General licenses authorize certain transactions involving food, agricultural commodities, medicine, and medical devices without requiring an individual application.5Office of Foreign Assets Control. Frequently Asked Questions – Humanitarian General Licenses U.S. financial institutions can process fund transfers tied to authorized humanitarian shipments.
General licenses are self-executing. If your transaction fits the terms, you can proceed without asking permission. The terms are specific, though, and assuming you qualify without reading the actual license text is where people get into trouble.
When no general license covers your situation, you can apply for a specific license through OFAC’s online portal. OFAC evaluates these case by case and will not issue a specific license when a general license already applies.6Office of Foreign Assets Control. OFAC Specific Licenses and Interpretive Guidance Processing times vary. For Iran in particular, license applications can take over a year. Plan accordingly.
Penalties
The International Emergency Economic Powers Act sets two tiers of penalties, and the difference between them matters. Civil penalties apply to any violation, regardless of intent. Criminal penalties require the government to prove you acted willfully.
Criminal conviction can bring a fine of up to $1,000,000 per violation and, for individuals, imprisonment of up to 20 years.7Office of the Law Revision Counsel. 50 USC 1705 – Penalties These numbers target people who knowingly circumvent sanctions, not compliance officers who misread a general license.
Civil penalties are more common. The statutory base is up to $250,000 per violation or twice the transaction amount, whichever is greater.7Office of the Law Revision Counsel. 50 USC 1705 – Penalties The $250,000 figure is adjusted for inflation, and the current maximum sits at $377,700 per violation.8U.S. Department of the Treasury. Notice – Inflation Adjustment to Maximum Civil Monetary Penalty For large transactions, the “twice the transaction amount” multiplier can dwarf the base. A single prohibited $5 million wire could theoretically trigger a $10 million civil penalty.
Non-U.S. persons face exposure too. OFAC prohibits foreign individuals and entities from causing U.S. persons to violate sanctions, conspiring to evade U.S. restrictions, or engaging in conduct designed to circumvent them. Secondary sanctions, particularly in the Iran and North Korea programs, can cut foreign companies off from the U.S. financial system entirely for dealing with sanctioned countries, even when no U.S. person was directly involved.
What Businesses Need To Do
OFAC has published a compliance framework built around five components: management commitment, risk assessment, internal controls, testing and auditing, and training.9Office of Foreign Assets Control. A Framework for OFAC Compliance Commitments The sophistication of your program should match your risk. A multinational bank needs a more elaborate apparatus than a domestic retailer, but every business transacting internationally needs something.
Screen Against the SDN List
At a minimum, screen customers, vendors, and counterparties against OFAC’s Specially Designated Nationals (SDN) List. U.S. persons cannot engage in any transactions with SDNs and must block any property in their possession in which an SDN has an interest.10Office of Foreign Assets Control. Specially Designated Nationals and the SDN List OFAC provides a free Sanctions List Search tool that uses fuzzy logic to catch near-matches across the SDN List and other consolidated lists.11Office of Foreign Assets Control. Sanctions List Search Tool
A name match does not automatically mean you have found a sanctioned person. OFAC recommends checking whether the match is exact, whether the customer sits in the same geographic area as the listed SDN, and whether other identifying details align. False hits are common with common names. When doubt remains, OFAC’s compliance hotline can help verify.
Keep Records
Anyone engaged in a transaction subject to OFAC regulations must maintain complete records for at least 10 years after the transaction date. For blocked property, records must be kept for the entire duration the property remains blocked plus at least 10 years after it is unblocked, which can mean decades of retention.12eCFR. 31 CFR 501.601 – Records and Recordkeeping Requirements
If you are holding blocked property, you must file an annual report with OFAC by September 30 each year.13Office of Foreign Assets Control. Filing Reports with OFAC Retaining documentation of your compliance work, including screening logs, due diligence results, and training records, creates an evidentiary trail that can reduce penalties if something goes wrong.
Self-Disclose Violations
If your organization spots a potential violation, OFAC encourages voluntary self-disclosure. In early 2026 OFAC launched an online Voluntary Self-Disclosure Portal to handle these submissions.14Office of Foreign Assets Control. Launch of Voluntary Self-Disclosure Portal Disclosure does not guarantee immunity, but OFAC’s enforcement guidelines treat it as a significant mitigating factor. Failing to disclose a known violation is treated as an aggravating one. The math usually favors coming forward.