The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) administers several overlapping counterterrorism sanctions programs that block the property and prohibit transactions with designated terrorists, terrorist organizations, and their supporters. The two principal authorities are Executive Order 13224 (signed by President George W. Bush on September 23, 2001, shortly after the 9/11 attacks) and the older Foreign Terrorist Organization (FTO) framework derived from the Antiterrorism and Effective Death Penalty Act of 1996, which feeds into OFAC's Specially Designated Global Terrorist (SDGT) list.
Designated persons and entities are added to OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the tag [SDGT]. Once listed, all property and interests in property within U.S. jurisdiction are frozen, and U.S. persons—including banks, companies, and individuals—are generally prohibited from any dealings with them, absent a specific or general license from OFAC.
Key features include:
- Secondary sanctions exposure: Foreign financial institutions that knowingly facilitate significant transactions for SDGTs can themselves face restrictions on correspondent accounts under measures such as Section 311 of the USA PATRIOT Act.
- Broad reach of EO 13224: It covers not only those who commit or threaten terrorism, but also those who materially assist or are owned or controlled by designated parties (the so-called 50 Percent Rule).
- Humanitarian carve-outs: Following UN Security Council Resolution 2664 (December 9, 2022), OFAC issued general licenses authorizing certain humanitarian activities involving SDGTs, including by NGOs, the UN, and the ICRC.
Designations are made by Treasury in consultation with the State and Justice Departments. Delisting requires a petition under 31 C.F.R. § 501.807. Programs target groups including al-Qa'ida, ISIS, Hizballah, Hamas, the IRGC-Qods Force (also under EO 13224 as amended in 2019), and various affiliates worldwide.
Example
In October 2023, OFAC designated ten Hamas members and financial facilitators across Gaza, Sudan, Türkiye, Algeria, and Qatar under Executive Order 13224 following the October 7 attacks on Israel.
Frequently asked questions
FTO designations are made by the Secretary of State under the Immigration and Nationality Act and carry criminal material-support liability under 18 U.S.C. § 2339B. SDGT designations are made by Treasury under EO 13224 and focus on asset freezes and transaction bans. Many groups, such as Hamas and ISIS, are designated under both.
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