OFAC Sectoral and Non-SDN Lists
A practitioner's guide to OFAC's non-SDN restrictions — the SSI List, NS-CMIC List, FSE List, and Section 13(r) — and how sectoral sanctions differ from blocking.
The Architecture Beyond Blocking
The Specially Designated Nationals and Blocked Persons List (SDN List) is OFAC's flagship instrument, but it is not the agency's only register. Beginning with the response to Russia's annexation of Crimea in 2014, the U.S. Treasury developed a parallel architecture of non-SDN lists that impose narrower, surgical restrictions rather than full blocking. These tools allow Washington to pressure strategic sectors of a target economy — finance, energy, defense — without freezing every asset or severing every commercial tie. The distinction matters operationally: an SDN designation under Executive Order 13224 (counterterrorism) or E.O. 13818 (Global Magnitsky) prohibits virtually all dealings and blocks property within U.S. jurisdiction; a non-SDN listing prohibits only the specific transactions identified in the underlying directive.
The Sectoral Sanctions Identifications (SSI) List
The SSI List was created on 16 July 2014 under Executive Order 13662, which authorized sanctions on sectors of the Russian Federation economy. OFAC implements E.O. 13662 through four directives, each prohibiting a discrete category of transaction with named entities:
- Directive 1 (most recently amended 28 September 2017) targets the financial services sector. It prohibits U.S. persons from transacting in new debt of longer than 14 days maturity or new equity of listed entities such as Sberbank, VTB Bank, Gazprombank, and Vnesheconombank.
- Directive 2 targets the energy sector and prohibits dealings in new debt of longer than 60 days maturity for listed firms including Rosneft, Transneft, and Gazprom Neft.
- Directive 3 addresses the defense and related materiel sector, prohibiting transactions in new debt of longer than 30 days for entities such as Rostec.
- Directive 4 restricts the provision of goods, services, or technology in support of exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil — a directive expanded under CAATSA (Public Law 115-44, 2 August 2017) to cover such projects worldwide where SSI entities hold a 33% or greater interest.
Crucially, an SSI-listed entity is not blocked. A U.S. bank may still clear a wire for Sberbank for legitimate trade finance under permissible maturities; what it may not do is purchase a 30-day Sberbank bond. This is the operational hallmark of sectoral sanctions: prohibition by transaction type, not by counterparty identity.
The 50 Percent Rule and SSI
OFAC's 50 Percent Rule, articulated in the 13 August 2014 guidance, applies to SSI listings as it does to SDN designations. An entity owned 50% or more, directly or indirectly, in the aggregate, by one or more SSI parties is itself subject to the same directive restrictions, even if not separately listed. Compliance officers must therefore screen not only against the published SSI roster but against ownership chains — a particular burden in jurisdictions with opaque corporate registries. Where an SSI-listed parent also appears on the SDN List under a different program (as Rosneft did after the 22 February 2022 expansion under E.O. 14024), the more restrictive prohibition governs.