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Overview of OFAC Sectoral Sanctions Programs

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions programs to accomplish foreign policy and national security goals[1]. OFAC oversees a number of different sanctions programs that target specific countries, regimes, terrorists, narcotics traffickers, and other threats[2]. Sanctions can be comprehensive or selective, using blocking of assets and trade restrictions[3]. One type of selective sanction administered by OFAC is sectoral sanctions, which target key sectors of a foreign economy.

What are Sectoral Sanctions?

Sectoral sanctions are intended to apply pressure on a foreign government by limiting access to U.S. financing in key sectors of that country’s economy[4]. For example, in response to Russia’s actions in Ukraine in 2014, OFAC imposed sectoral sanctions targeting Russia’s financial services, energy, and defense sectors[5].

Sectoral sanctions prohibit U.S. persons and companies from providing financing to or engaging in certain transactions with individuals and entities operating in the targeted sectors. The goal is to restrict access to U.S. capital, technology, and markets for key sectors in order to increase pressure on the foreign government[6].

Key Features of OFAC Sectoral Sanctions

There are several key features of OFAC’s sectoral sanctions programs:

  • Targeted sectors – OFAC identifies specific sectors like finance, energy, or defense.
  • List-based approach – OFAC publishes a Sectoral Sanctions Identifications (SSI) List of entities determined to be operating in the targeted sectors.
  • Limited prohibitions – The sanctions restrict certain dealings like extending credit or transacting in debt/equity, but do not block all dealings.
  • Directive-based restrictions – OFAC issues directives that outline the specific prohibited transactions for each targeted sector.

Russia/Ukraine-Related Sectoral Sanctions

In response to Russia’s annexation of Crimea and destabilizing activities in Ukraine in 2014, OFAC imposed sectoral sanctions targeting Russia’s financial services, energy, and defense sectors. The goal was to impose costs on Russia, constrain access to financing, and pressure the government to change course.

OFAC issued four directives outlining prohibited transactions with entities on the SSI list:

  • Directive 1 – Financial services sector
  • Directive 2 – Energy sector
  • Directive 3 – Defense sector
  • Directive 4 – Additional prohibitions

For example, Directive 1 prohibits U.S. persons from transacting in new debt of greater than 90 days maturity or new equity for entities on the SSI list operating in Russia’s financial sector. Over time, OFAC has amended the directives to adjust the prohibitions.

Christine Twomey
Christine Twomey
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Brendan huisman
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Guerline Menard
Guerline Menard
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
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Keisha Parris
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
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Bee L
Bee L
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divesh patel
divesh patel
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

As of September 2022, OFAC’s SSI list includes over 200 entities linked to Russia’s financial services, energy, and defense sectors. U.S. persons must screen transactions against the SSI list to ensure compliance.

Challenges and Criticisms

While sectoral sanctions provide a more targeted approach than comprehensive sanctions, there are some challenges and criticisms:

  • Difficulty avoiding spillover effects into untargeted sectors of the economy.
  • Entities may adjust business practices to circumvent the prohibitions.
  • Hard to craft directives that are not too broad or narrow.
  • Can still have unintended humanitarian costs by restricting financing.
  • Limited effectiveness in achieving policy goals in some cases.

Policymakers have to weigh these potential downsides against the benefits when determining whether to utilize sectoral sanctions.


OFAC’s sectoral sanctions programs aim to provide a middle ground between comprehensive sanctions and no sanctions. By targeting key sectors of a foreign economy, sectoral sanctions attempt to impose economic costs while minimizing unintended effects. However, crafting effective directives and preventing circumvention remains a challenge. The Russia/Ukraine sectoral sanctions demonstrate both the potential benefits and limitations of this approach to sanctions.


[1] Office of Foreign Assets Control

[2] OFAC Sanctions Programs


[4] CRS Report

[5] Ukraine/Russia Sanctions

[6] CRS In Focus

SSI List

Ukraine/Russia Sanctions

CRS In Focus

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