Introductory Note Common to all Derivative Designation Notices ("De Facto" Secondary Sanctions) Included in the Research System (System Ed. Note)

Last substantive commentary amendment:
Apr. 21 2024

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TURBOFAC Commentary (845 words)

Introductory Note Common to all Derivative Designation Notices ("De Facto Secondary Sanctions) Included in the Research System (System Ed. Note)

For the purposes of discerning the degree to which OFAC is willing to use broad, vaguely worded "derivative designation" criteria to block non-U.S. persons for international trade transactions that are unrelated to the U.S.—and are therefore a kind of de facto "secondary sanction"—we highlight certain notable designation notices. OFAC began posting designation notices in 2001. Many of these are based on the standard "material assistance" designation criterion. Some are based on a determination that a person is "operating in" a designated economic sector of a target country. Read in the context of General Note on Secondary Sanctions and “Derivative Designation” Criteria; Identification of the Gap Between the Theoretical and Practical Scopes of Authorities Targeting Transactions with no U.S. Nexus; Enforcement Risk Management (System Ed. Note).

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