The whole thing in one paragraphA U.S. sanction is, mechanically, a very small thing: the President declares a national emergency, an office at Treasury publishes a name, and from that moment every U.S. person is forbidden to deal with it and any property it holds in U.S. jurisdiction is frozen where it sits. What turns that small domestic act into a global one is not law but plumbing. Almost every cross-border dollar payment on earth is settled through an account at a bank in New York, and the dollar is on one side of 89.2% of all foreign-exchange trades. Being named is not a fine. It is being removed from the financial system most of the world uses to get paid.
Everything else — secondary sanctions, the 50 percent rule, general licences, the difference between the SDN List and four other lists — is engineering on top of that one fact.
89.2%
of global FX trades have the dollar on one side
BIS Triennial Survey, April 2025 — up from 88.4% in 2022. Turnover is $9.6 trillion a day.
57.1%
of allocated central-bank reserves are in dollars
IMF COFER, 2026 Q1. Down from a 71.0% peak in 1999 — and only ~1.8 points below 1995.
28.9%
is the euro's share of FX trades — the nearest rival
BIS, April 2025. The renminbi is 8.5%, the yen 16.8% (shares sum to 200%).
37
active OFAC sanctions programs
Counted on OFAC's own programs page, 22 July 2026. Treasury reported 69 sanctions authorities in 2000 and 176 in 2021.
The blocking order
A designation under the International Emergency Economic Powers Act (IEEPA, 1977) does not seize property — it freezes it. Every dollar, security, building and contract the target holds in U.S. jurisdiction becomes "blocked": it stays where it is, earns interest, and cannot move without a licence. U.S. persons anywhere in the world are then barred from dealing with the target at all. There is no hearing first. The designation is effective the moment it is published.
The 50 percent rule
OFAC treats any company owned 50% or more, directly or indirectly, by one or more blocked persons as blocked itself — automatically, whether or not it is ever named. This is why a list of 19,169 entries touches vastly more than 19,169 businesses, and why sanctions compliance is fundamentally an ownership-research problem rather than a name-matching one.
Correspondent banking — the real chokepoint
Almost every cross-border dollar payment is ultimately settled through an account at a U.S. bank. A Turkish bank paying a Chinese supplier in dollars does it through its correspondent in New York. That single architectural fact is what converts a U.S. domestic prohibition into a global one: to be cut off from dollar clearing is to be cut off from most international trade finance, regardless of where you are incorporated.
Secondary sanctions
The genuinely extraterritorial instrument. A secondary sanction threatens a foreign firm with designation for conduct that has no U.S. nexus at all — an Indian refiner buying Iranian crude, a Chinese bank clearing for a designated Russian company. The foreign firm has not broken U.S. law; it is simply offered a choice between the target's business and the dollar system. First used at scale against Iran under CISADA (2010), and the reason allies have repeatedly objected that U.S. sanctions bind their companies without their consent.
General licences — the release valve
Because a blocking order is total by default, almost every real program is made workable by exceptions. General licences authorise whole categories of transaction — food and medicine, telecoms, NGO relief, wind-down periods for existing contracts. They are also where policy actually gets made: the difference between a "comprehensive embargo" that starves a country and one that does not is very often a general licence, not the underlying order.
Not one list but several
The SDN List is the blocking list. Alongside it OFAC maintains the Sectoral Sanctions Identifications (SSI) List — targets you may trade with but not lend to beyond a set maturity; the Non-SDN Chinese Military-Industrial Complex list, which bars investment rather than trade; the Foreign Sanctions Evaders list; and the Correspondent Account/Payable-Through Account (CAPTA) list, which strips a foreign bank of dollar access without freezing it. Each is a different degree of severity, and they are routinely conflated in reporting.