The OFAC Sanctions List Explained — What Polish Companies Need to Know

OFAC — the Office of Foreign Assets Control, part of the United States Department of the Treasury — maintains the SDN list, the Specially Designated Nationals and Blocked Persons List, one of the most widely applied sanctions lists in the world.¹ Formally, it is US law that applies to entities connected to the United States. In practice, it touches Polish companies in any situation involving US dollar transfers, counterparties with exposure to the US market, or contracts containing a compliance clause. This article explains how the OFAC list differs from the EU list, when and how to screen against it, and what to do when a match appears.

Legal status as of: 2026-05-20.

TL;DR

• OFAC (Office of Foreign Assets Control) is an agency of the US Department of the Treasury; it maintains the SDN list (Specially Designated Nationals), which contains persons and entities subject to US sanctions.¹
• The OFAC list affects Polish companies indirectly, but tangibly — when you settle transactions in USD, have a counterparty with US exposure, or your contract includes a sanctions clause.
• Secondary sanctions are a tool the US can use to cut off a non-US company from the dollar system for doing business with an SDN-listed entity — even without any direct connection to the United States.
• The 50% rule applies in OFAC exactly as it does in EU law: an entity controlled more than 50% by a person on the SDN list is treated as if it were listed itself.
• You can search counterparties free of charge at sanctionssearch.ofac.treas.gov — this is the official OFAC Sanctions List Search service.
• The OFAC list and the EU list are two entirely separate systems — you cannot assume that checking one replaces checking the other.
• If you get a match: do not proceed with the transaction, freeze any funds involved, and consult a lawyer or compliance officer before taking any further step.

What OFAC and the SDN List Are

OFAC — the Office of Foreign Assets Control — is an agency of the United States Department of the Treasury responsible for administering US economic sanctions programmes.¹ It is not a judicial or law-enforcement body — OFAC operates through administrative prohibitions and asset freezes, and its decisions take effect immediately.

OFAC’s flagship product is the SDN list — the Specially Designated Nationals and Blocked Persons List. The list contains the names of individuals, companies, vessels, and aircraft whose assets within US jurisdiction are blocked and all transactions involving them are prohibited.¹ Beyond the SDN list, OFAC also maintains sectoral lists known as SSI (Sectoral Sanctions Identifications) and others — these do not block entities outright, but restrict specific categories of transactions.

The raw SDN list file can be downloaded free of charge from the OFAC website in several formats, including XML and CSV. For day-to-day screening, the Sanctions List Search tool is available at sanctionssearch.ofac.treas.gov.¹ This tool is free, official, and supports searches by name, city, country, document number, and sanctions programme code.

Why Polish Companies Need to Know the OFAC List

The standard question here is: “That’s US law — why should a company based in Poznań care?” The answer lies in four scenarios. Each of them may apply to your company, even if you have no operations in the United States and not a single US customer.

Settlement in US Dollars

Every US dollar transfer — regardless of where it originates or where it is headed — passes through correspondent banks in the United States. Those banks are subject to US law and are required to filter transactions against the SDN list. If an SDN-listed person or entity appears anywhere on the path of your transfer, the correspondent bank will block the transaction and may freeze funds in transit — regardless of your knowledge or intent. For your company, this means delayed or lost payments, frozen accounts, and the costs of investigation. We explore this mechanism in more depth in our article on how sanctions affect payments and transfers.

Counterparties with US Market Exposure

Your trading partner may not appear on the SDN list itself, but may have an ultimate beneficial owner (UBO) who does. If that beneficial owner holds more than 50% of the shares or exercises effective control over the company, then — under OFAC’s 50% rule — the entire company is treated as a blocked entity. You are therefore entering into a transaction with a de facto listed entity without knowing it.

Contracts with a Sanctions Clause

Standard commercial contracts, particularly with Western European and US partners, increasingly include a compliance clause committing to compliance with “applicable sanctions, including but not limited to OFAC regulations.” If you sign such a contract and it later emerges that your sub-contractor is on the SDN list, you are in breach of contract regardless of whether you have violated domestic law. The consequence is termination of the agreement for reasons attributable to your side, and potential claims for damages.

Secondary Sanctions — The Most Serious Risk

Secondary sanctions are an instrument the US uses to penalise non-US entities for conducting significant activity with specific sanctions programmes — primarily those relating to Iran, designated Russian entities, and sectors covered by US sanctions against Russia and Belarus. The mechanism is straightforward: if your company repeatedly and knowingly conducts transactions with an entity subject to US secondary sanctions, OFAC may place your company on the SDN list. From that point, no bank anywhere in the world that settles through the dollar system can work with you. This is an effective block on access to international markets, which for an exporting or importing company amounts to the end of operations.

Secondary sanctions are applied selectively — primarily against major players or companies that are clearly acting as intermediaries circumventing sanctions. We discuss how such schemes operate and why they attract regulatory attention in our article on sanctions circumvention through third countries. For a small Polish company, the risk of direct listing is low. The indirect risk — of transfers being blocked by correspondent banks acting preventively — is already real and happens with some frequency.

The OFAC List versus the EU List — Key Differences

Many companies assume that checking the EU Consolidated List (maintained by DG FISMA)² is sufficient and covers the OFAC list as well. This is a mistake. The lists are maintained by two separate legal systems, they differ in scope, legal basis, and enforcement mechanism.

The key takeaway: checking the EU list does not replace OFAC screening, and vice versa. A person may be on the SDN list without appearing on the EU list — and the reverse is equally true. The minimum practice for a Polish company with USD turnover is to screen against both databases.

If you would like a full comparison of all five main sanctions lists (EU, UN, OFAC, OFSI, and MSWiA), read our article EU, UN, OFAC and MSWiA sanctions lists — a guide.

How to Screen a Counterparty on the OFAC List — Step by Step

OFAC provides the free Sanctions List Search tool at sanctionssearch.ofac.treas.gov.¹ The process below describes verification from opening the page through to documenting the result.

Step 1: Open Sanctions List Search

Open your browser and go to sanctionssearch.ofac.treas.gov. This is the official US government service — no other search tool is an authorised OFAC source. The site is free and requires no registration.

Step 2: Select the List Scope

By default, the search tool queries all OFAC lists simultaneously, including the SDN list and the sectoral lists (SSI, NS-MBS, and others). You can narrow the scope to the SDN list alone, but for counterparty screening it is recommended to leave all active programmes selected.

Step 3: Enter the Counterparty’s Details

In the search field, enter the company name or the individual’s full name. The tool supports fuzzy matching — it returns results that are phonetically similar. Set the Similarity Score slider: a value of 100 means an exact match; 80–85 is a good compromise between precision and sensitivity.

Tip: also search for transliteration variants — if you are checking a person with a Russian or Ukrainian name, try several Latin-script spellings (e.g. “Ivanov”, “Iwanov”, “Ivanoff”). The SDN list contains aliases, but not always every possible variant.

Step 4: Analyse the Results

Each result contains: a name or surname, alias, country, date of birth (if known), identification number (passport, company registration number), and sanctions programme code. A matching name alone is not sufficient — you must compare identifiers: date of birth, country of residence, and document numbers. Two people sharing the same surname are a frequent source of false positives.

Step 5: Check the Ultimate Beneficial Owner (UBO)

Screening the counterparty alone without checking their ultimate beneficial owner is an incomplete verification. If an entity is owned more than 50% by a person on the SDN list, that entity itself is treated as blocked — even if its own name does not appear in the results (see: the 50% Rule below). Obtain a company register extract, articles of association, or commercial registry record from the counterparty’s country of registration and check the ownership structure — we describe the full procedure in our article on screening counterparties for sanctions compliance.

Step 6: Document the Result

Whether the result is CLEAR or POSSIBLE — record the date and time of the search, the list version (shown on the OFAC site after the search completes), the data you entered, and the result obtained. This record is your evidence of due diligence. Keep it together with the transaction documentation — it may be required during an inspection by the Head of the National Revenue Administration (Szef KAS)¹⁰ or in response to questions from your correspondent bank.

The 50% Rule in OFAC

The 50% rule is one of the most important and most frequently overlooked aspects of OFAC screening. Its logic is straightforward: an entity that is more than 50% owned by a person or company on the SDN list is treated as a blocked entity — regardless of whether its own name appears on the list.¹

In practice, this means that checking the OFAC list by searching for the company name alone is insufficient if you do not simultaneously verify the ownership structure. If your counterparty is a limited liability company in which 51% of the shares are held by a person on the SDN list — and that company does not itself appear on the list — a transaction with that company still violates OFAC sanctions.

The 50% rule also applies cumulatively: if two SDN-listed persons hold 30% and 25% of the shares in a company respectively, their combined holding is 55% — the company is blocked. You must therefore verify not just one owner, but the entire shareholding structure.

An equivalent principle applies in EU law, where the threshold of ownership or control that brings an entity within the scope of sanctions is more than 50%.⁷ The difference is that EU law also applies a control criterion — an entity can be brought within sanctions if a listed person exercises effective control over it even with a lower ownership stake. In practice OFAC applies a similar approach, but sets it out in separate FAQ documents and guidance (OFAC Guidance).

What to Do When There Is a Match

A match on the OFAC list — whether a MATCH result or even an ambiguous POSSIBLE — is a situation that requires the immediate suspension of the transaction and careful handling. The steps below describe what you should do.

1. Stop the Transaction

Do not make the payment, do not release the goods, do not provide the service. Any transaction with an entity subject to OFAC sanctions — even an inadvertent one — can have serious financial and reputational consequences for your company and for the bank through which you transfer the funds.

2. Freeze the Funds If They Have Already Arrived

If an SDN-listed entity has already made a payment into your account or transferred funds to you in any other form, you are obliged to block (freeze) those funds. You may not return them without OFAC authorisation — even returning the funds is a transaction that may violate sanctions.

3. Distinguish Between POSSIBLE and MATCH

A POSSIBLE result (potential match — incomplete correspondence) is not the same as MATCH (confirmed match). With a POSSIBLE result, you should gather additional identifying information from the counterparty (identity document number, company registration number, address) and compare it with the data on the SDN list. Only after this verification do you decide whether you are dealing with a false positive or a genuine match. Document the entire process in writing.

4. Consult a Lawyer or Compliance Officer

A match on the OFAC list requires a legal assessment, not an operational decision. Contact a lawyer specialising in sanctions law before taking any further step — including before notifying any authority.

5. File a Report If Required

If you are an entity with US nexus (for example, you have a subsidiary in the US, or you settle through a bank headquartered in the US), you may be required to report the match to OFAC. For a Polish company without US nexus, this obligation does not apply directly — but your correspondent bank may have its own reporting procedures that are triggered automatically when a transaction is blocked.

In Poland, matches on sanctions lists (including situations involving OFAC sanctions where they affect flows through Polish accounts) may be subject to reporting to the Head of KAS¹⁰ or GIIF (Generalny Inspektor Informacji Finansowej — the General Inspector of Financial Information)¹¹ — depending on the circumstances of the case. The reporting obligation and its scope are worth establishing with a lawyer before a potential match arises, not in the middle of a crisis.

FAQ — OFAC Sanctions List

Does the OFAC SDN list apply to Polish companies?

Not directly — the SDN list is US law that applies to U.S. persons and transactions within the US financial system.¹ Indirectly, yes, in four situations: settlement in USD (clearing through US banks), a counterparty or UBO with US exposure, a contract with a sanctions clause covering OFAC, and export of goods containing US-origin components. In the absence of any touchpoint with the United States, direct risk is minimal — but the blocking of a USD transfer by a correspondent bank is a real risk even without a formal legal obligation.

What is the difference between the SDN list and OFAC’s sectoral lists (SSI)?

The SDN list blocks an entity completely — no transactions with it are permitted without an OFAC licence. The sectoral lists (SSI — Sectoral Sanctions Identifications) restrict only specific categories of transactions with a given entity — for example, a prohibition on new loans with a maturity of more than 30 days, or a ban on capital market transactions. Entities on the SSI lists may be parties to ordinary commercial transactions, provided those transactions do not fall into a prohibited category.

What does “US nexus” mean and how do I know if my company has one?

US nexus is any connection between your company and the United States: a branch or subsidiary in the US, partners or employees who are US citizens or residents, transactions settled through US-based banks, goods or technologies originating in the US (US-origin goods), or software licensed under US terms that you re-export. Even the use of certain cloud platforms may create a US nexus within the meaning of US export regulations.

Do I need to screen customers against OFAC for every transaction?

If your company regularly settles in USD or has counterparties with US exposure — yes, screening at each significant transaction is good practice. The minimum approach is to screen when onboarding a new counterparty and at each new contract, plus a periodic review of the existing counterparty base (quarterly). The SDN list is updated continuously — an entity that is CLEAR today may be listed tomorrow.

What are the consequences for a Polish company of transacting with an SDN-listed entity?

Direct liability to OFAC applies to entities with US nexus. For a Polish company without US nexus, direct OFAC penalties do not apply. The real risks are: blocking of a USD transfer by a correspondent bank, termination of a contract by a foreign partner, refusal of banking services (a bank’s due diligence may result in the end of the relationship), and, in extreme cases, the listing of your company on the SDN list through the secondary sanctions mechanism.

How often should I update data from the OFAC list?

OFAC updates the SDN list on an ongoing basis. When checking manually, download the current file from ofac.treasury.gov on the day of each verification — an old file is not a reliable source. With an automated screening system, ensure that your provider updates the data at least once a day.¹

How Sanqto Can Help

Manually checking the OFAC SDN list, the EU Consolidated List, and the Polish MSWiA list¹² for every transaction is possible, but time-consuming and prone to human error — particularly when verifying aliases, transliterations, and ownership structures. Sanqto automates this process: the software retrieves current data from DG FISMA,³ OFAC,¹ and MSWiA (Ministry of Interior and Administration — the body responsible for Poland’s national sanctions list), consolidates it in a single database, and returns a result in a three-state model — MATCH, POSSIBLE, or CLEAR. It operates on-premise, so your counterparty data never leaves your company’s infrastructure. Response time per query is under 30 ms. The implementation package includes a sanctions policy, a match register, and a position-specific instruction document — the records you will need in the event of an inspection by the Head of KAS.¹⁰

If you operate in an industry that is particularly exposed to OFAC risk — for example, tourism with non-EU clients, or insurance with counterparties from Eastern markets — see our industry pages: travel agencies and OTAs, insurance agencies.

For more on whether your company is legally required to carry out sanctions screening at all, read our article does my company need to conduct sanctions screening.

Legal Basis

• OFAC Specially Designated Nationals and Blocked Persons List (SDN) — U.S. Department of the Treasury — ofac.treasury.gov
• OFAC Sanctions List Search — sanctionssearch.ofac.treas.gov
• Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine — CELEX 32014R0269
• Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine — CELEX 32014R0833
• Act of 13 April 2022 on special solutions in the field of countering support for aggression against Ukraine and serving the protection of national security (Journal of Laws 2022, item 835) — ISAP
• EU Financial Sanctions Database (DG FISMA) — webgate.ec.europa.eu/fsd/fsf
• EU Sanctions Map — sanctionsmap.eu
• Polish sanctions list — MSWiA (Ministry of Interior and Administration) — gov.pl/web/mswia
• Act of 1 March 2018 on counteracting money laundering and terrorist financing (Journal of Laws 2018, item 723) — ISAP

Footnotes

Information, not legal advice. This article is for informational and educational purposes only. It does not constitute legal advice. Legal status as of: 20 May 2026. Your company’s specific obligations depend on its business profile and require individual assessment — if in doubt, consult a lawyer or compliance adviser.