In today’s interconnected financial and commercial systems, appearing on—or even being associated with—U.S. restricted party list (“RPL”) can lead to serious legal, financial, and reputational consequences. Whether you’re a foreign entrepreneur, multinational business, or simply share a name with someone listed, understanding the risks and your response options is essential. This article explains the major U.S. RPLs, how to check them, and what to do if you discover that you or your organization appears on a U.S. restricted party list.

U.S. Restricted Party Lists

There are many lists administered by various U.S. government agencies that fall under the broad umbrella of the U.S. restricted party list regime. All such lists impose certain restrictions in relation to the targets they identify based on the various designation criteria of their respective legal authorities. The most impactful lists are administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the Department of Commerce’s Bureau of Industry and Security (“BIS”), which include:

• OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List—the most active RPL, with approximately 15,000 entries. Listings result in full blocking sanctions—i.e., all of the listed party’s property interests that are or come within the United States or the possession or control of U.S. persons, wherever located, are blocked (i.e., “frozen”). U.S. persons are generally prohibited from transactions with SDNs. Pursuant to OFAC’s 50 Percent Rule, any entity that is owned 50 percent or more by such listed persons, either individually or in the aggregate, is also considered sanctioned to the same extent as the listed persons, regardless of whether their name appears on the SDN List (i.e., “constructively sanctioned”).

• OFAC’s Sectoral Sanctions Identifications (“SSI”) List—identifies persons in targeted sectors of the Russian economy pursuant to any one of four directives issued under E.O. 13662, including: Directive 1 (as amended), Directive 2 as amended), Directive 3, and Directive 4. Restrictions are narrower than full blocking (e.g., limited debt/equity transactions). OFAC’s 50 Percent Rule also applies to the SSI List.

• Non-SDN Menu-Based Sanctions (“NS-MBS”) List—another OFAC administered list that identifies parties to less-than-full blocking sanctions. Often used in OFAC’s Russia-related sanctions programs (e.g., Directive 3 under E.O. 14024 for limited /debt/equity restrictions). U.S. persons are prohibited from engaging in certain new debt and new equity transactions with such identified persons. Application of the 50 Percent Rule is directive specific (see e.g., FAQ #985 for Directive 3).

• Other OFAC sanctions lists—are used much less often, but include the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (“CAPTA”) List, the Foreign Sanctions Evaders (“FSE”) List, Non-SDN Palestinian Legislative Council (“NS-PLC”) List, and the Non-SDN Chinese Military-Industrial Complex Companies List (“NS-CMIC List”). Their respective restrictions vary, but are less than full blocking sanctions. The 50 Percent Rule applies only if expressly stated by OFAC (e.g., FAQ #969 for application of 50 Percent Rule to OFAC’s Russia-related CAPTA Directive vs. FAQ #857 noting that it does not apply to the NS-CMIC List).

OFAC’s legal authorities also prohibit causing a violation, even indirectly (the “Causation Principle”). This can impact non-U.S. persons who create a U.S. nexus in a transaction with a U.S. sanctioned party, for example by denominating a transaction in USD, which is typically processed by an intermediary U.S. financial institution.

• BIS Entity List—the agency’s largest and most active list, targets foreign individuals and entities (including addresses since June 18, 2024) believed to pose a risk to U.S. national security or foreign policy interests in accordance with the Export Administration Regulations (“EAR”), 15 C.F.R. § 744.16. Generally speaking, items (commodities, software, or technology) subject to the EAR cannot be transferred by anyone to listed parties without a license from BIS (however certain listing have less restrictive measures). As of September 29, 2025, BIS implemented its own version of the 50 Percent Rule (the “Affiliates Rule”), which is near identical to OFAC’s as compared in our article. The Rule provides that the same license requirements, exceptions, and review policies specified for a listed entity on the Entity List, Military End-User (“MEU”) List, or SDNs designated under programs listed in § 744.8, apply to any foreign entity that is owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more listed entities or entities that are subject to restrictions based upon their ownership (“constructively listed”).

• BIS Unverified List (“UVL”)—pursuant to § 744.15 of the EAR, a foreign person who has been a party to transfer subject to the EAR may be added to the UVL if BIS cannot verify their bona fides (i.e., legitimacy and reliability relating to the end use and end user of items subject to the EAR) during the course of pre-license check or a post-shipment verification. Applicable restrictions include certain additional transactional documentation requirements and the loss of BIS license exceptions. BIS’s Affiliates Rule does not apply to the UVL.

• BIS Denied Persons List (“DPL”)—as set forth in §746.3(a)(2), identifies parties restricted from engaging in transactions involving items subject to the EAR pursuant to BIS-issued denial orders. BIS’s 50 Percent Rule does not applied to the DPL.

Regarding the foregoing BIS administered lists, the term items subject to the EAR doesn’t just include U.S. origin items wherever located, but also foreign made items that either incorporate U.S. origin items exceeding certain defined thresholds (the “de minimis rule”), or in certain instances foreign made items that are the direct product of U.S. technology or software (the “Foreign Direct Product Rule”).

Checking Whether You or Your Organization are Listed

Being listed or misidentified as listed on a U.S. restricted party list can be financially and reputationally damaging. However, there are various screening tools available for checking whether you or your organization are indeed listed on a U.S. restricted party list, and not just a “false positive” result. Whether a screening result is a false or true positive requires the comparison of names and related biographical data identified by such tools with the same data points in your possession—including with government issued ID documents such as passports, corporate registry documents, etc.—to confirm.

• OFAC Sanctions List Search Tool—OFAC’s publicly available fuzzy-logic enabled tool that lets users search across all OFAC administered sanctions lists. It is updated in real-time in response to any additions, updates, or removals. Search results include not just listed names but also their available biographical data (e.g., date and place of birth, citizenship and nationality), known aliases, and relevant OFAC sanctions program(s) information.

• U.S. Department of Commerce’s International Trade Administration’s (“ITA”) Consolidated Screening List (“CSL”)—a publicly available searchable database that combines multiple U.S. government RPLs, including all of the BIS and OFAC lists. It also has “fuzzy name search” capabilities. Search results provide the listed names with their available biographical data, the relevant agency list and/or legal programs, and known aliases. The CSL is apparently updated at least daily, but not necessarily in real time.

• Restricted Party Screening Solution Providers—paid services that offer tailored automated screening solutions. For example, they can assist in screening efforts by: (1) syncing with an organization’s enterprise resource planning (“ERP”) or customer relationship management (“CRM”) system; (2) enabling batch screening; 3) continuous monitoring of inputted entries to instantly flag any relevant changes made to government RPLs; (4) assisting in identifying entities that may be subject to OFAC’s 50 Percent Rule or BIS’s Affiliates Rule; and (5) automating the identification and resolutions of false positive results. Other than human error, this latter ability—when it doesn’t work properly—is why you or your organization may have been mistakenly flagged by a counterparty as being on an RPL.

If you’re just conducting a one-time screening of a name because of concerns that it appears on an OFAC or BIS list, then OFAC’s Sanctions List Search Tool and the CSL should be sufficient. However, as BIS and OFAC encourage businesses to take a risk-based approach to sanctions and export controls compliance, a more robust screening process that involves the foregoing paid screening services may be necessary.

Unfortunately, the government provided RPS tools don’t identify constructively sanctioned entities for purposes of OFAC’s 50 Percent Rule or the Affiliates Rule. Unless you’re using a private vendor screening solution that is capable of assisting with such compliance efforts (e.g., curated lists of entities subject to the Rule), you’ll have to conduct your own beneficial ownership research to trace and confirm ownership information down to the ultimate beneficial owners of the entity in question (e.g., full legal names, ownership percentages), for screening purposes. Similarly, the government tools also will not identify if an individual or entity is in a comprehensively embargoed country/region (e.g., Iran, North Korea, Cuba, occupied regions of Ukraine), but private screening solutions may be able to assist in this regard as well.

Next Steps

If you or your organization are indeed listed on any of the foregoing RPLs, or constructively sanctioned, it is important to consult legal counsel with appropriate expertise not just for determining available options in challenging the listing, but also any relevant legal requirements. Such considerations include the following:  

• Administrative Petitions for Removal—OFAC and BIS maintain regulations for persons seeking removal from their respective lists. OFAC’s delisting procedures are set forth in 31 C.F.R. § 501.807. In prior articles I have covered the respective administrative removal process from BIS’s Entity List and the UVL, the former which was updated to take into account the Affiliates Rule and modification requests for unlisted entities subject to the Rule. The relevant regulations for removal from BIS’s DPL are set forth in 15 C.F.R. § 766.23(c). While such procedures differ in detail, the core principles underlying delisting are essentially aligned. The petitioning party should attempt to fully understand the U.S. government’s reasons for the listing action, which will impact the approach taken in removal process. In petitioning the agency, the general approaches that aren’t necessarily exclusive of one another include: (1) evidencing the government’s underlying reasons for the listing are legally or factually insufficient (generally a hard hill to climb as I’ve discussed in those prior articles); (2) establishing that the circumstances resulting in the listing are no longer applicable; and (3) proposing remedial steps (e.g., corporate reorganization, divestment, and other corrective actions) that would negate the basis for the listing. Litigation for challenging an initial listing action may also be possible, but it is typically more warranted in challenging denials of an administrative petition.

• Licensing—OFAC or BIS authorization may be required to engage in a transaction involving a party that is listed or constructively sanctioned/listed. Specific to OFAC’s full blocking sanctions, a specific license would be required from OFAC to unblock an SDN or constructively sanctioned person’s blocked property interests. Failure to secure necessary authorization can subject parties to the transaction to civil and/or criminal penalties.

If you’re not listed nor constructively sanctioned, but are dealing with a case of mistaken identity with counterparties, consider the following:

• Generally—Prepare and submit explanatory documents—including copies of government issued IDs and/or corporate registry documents—establishing that you or your organization are not the listed party.

• Credit Report OFAC Alerts— credit bureaus/agencies screen credit applicants against OFAC sanctions lists. However, because of stringent compliance efforts with OFAC sanctions programs, sometimes they mistakenly place an alert on issued credit reports when their screening software flags a potential match that isn’t internally resolved as a false positive. If it is indeed the case that the credit bureau/agency mistakenly placed an OFAC Alert on your credit report, as noted by OFAC itself in FAQ #71, a consumer has a right under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. 1681 et seq., to request the removal of the incorrect information.

• Mistaken Identity Blockings—if a counterparty, especially a financial institution, has erroneously blocked and reported your property to OFAC because of mistaken identity, then a license from OFAC may be required for their unblocking. While the organization who blocked the property may unblock such property in certain instances simply by filing an unblocking report with OFAC in accordance with certain regulatory procedures that I covered in a prior article, in all other instances authorization from OFAC would be required prior to their unblocking (which are generally subject to lengthy processing times). In any event, all other parties involved in the blocking (i.e., that weren’t the blocking party itself) will need to request specific license authorization from OFAC for the unblocking of the blocked property.

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The author of this blog post is Kian Meshkat, an attorney specializing in U.S. economic sanctions and export controls matters. If you have any questions please contact him at meshkat@meshkatlaw.com.