OFAC EO 14114

Executive Order 14114, signed by President Joseph R. Biden on December 22, 2023, amended earlier Russia-related executive orders (notably EO 14024 of April 15, 2021, and EO 14068 of March 11, 2022) to expand the U.S. Treasury's authority to impose secondary sanctions on foreign financial institutions (FFIs) outside the United States.

The order's core innovation is that it allows the Office of Foreign Assets Control (OFAC) to sanction an FFI — including by cutting off its correspondent or payable-through account access to the U.S. financial system — if that institution is determined to have:

• Conducted or facilitated any significant transaction for persons designated under the Russia sanctions program connected to Russia's military-industrial base; or
• Conducted or facilitated a significant transaction involving certain critical items (such as machine tools, semiconductors, and other goods identified by Treasury) destined for Russia.

OFAC concurrently published a determination identifying the military-industrial base as encompassing the technology, defense, construction, aerospace, and manufacturing sectors of the Russian economy. The order is notable because it shifts compliance risk onto banks in third countries — particularly in Turkey, the UAE, China, and Central Asia — that had been processing payments enabling Russian sanctions evasion and circumvention of export controls.

Treasury issued accompanying guidance and FAQs explaining that "significant transaction" is assessed using a totality-of-the-circumstances test (size, frequency, nature, awareness of the counterparty). Following EO 14114, several banks in jurisdictions including Turkey and the UAE reportedly tightened due diligence on ruble-denominated and dual-use goods transactions, and some publicly disengaged from Russian counterparties.

The order is a key example of the U.S. using financial extraterritoriality rather than direct designation to enforce sanctions compliance globally. It complements export-control measures under the Bureau of Industry and Security's Common High Priority List and parallels EU coordination on circumvention through the 11th and 12th sanctions packages.