Regulations administered by the Treasury Department’s Office of Foreign Asset Controls also prohibit “transactions or dealings” with persons and entities designated by OFAC as “specially designated nationals,” or “SDNs,” absent a special license. 31 cfr § 560.206(b). These persons and entities are listed on OFAC’s website. The list is changed frequently and must regularly be checked in connection with contemplated business transactions. For these purposes, a transaction includes any engagement for pay, or other contractual relationship, regardless of the amount in question.
Other U.S. government agencies also identify persons and entities with which one may not engage in business transactions because of terrorism risks or legal restrictions imposed on them. In addition to the SDN list, these lists should be checked before engaging in a transaction with a foreign person or entity. These include:
- Denied Persons. The Bureau of Industry and Security (BIS, in Department of Commerce) maintains a list of “Denied Persons” to whom BIS has denied the privilege to export, usually because they have previously violated U.S. export control laws.
- Entity List. BIS also maintains an “Entity List,” which includes individual foreign companies that are known or believed to be involved in weapons proliferation activities. The Entities List includes companies located in Afghanistan, China, India, Iran, Israel, Pakistan, Russia, Singapore, Syria, the UK, the United Arab Emirates and elsewhere. Specific restrictions applicable to each entity are identified on the List.
- Unverified List. BIS maintains an “Unverified List,” which includes foreign persons who in the past were parties to a transaction with respect to which BIS could not conduct a pre-license check or a post-shipment verification. Transactions with a person on the Unverified List raise a red flag with respect to the export.
- Debarred Parties List. The Directorate of Defense Trade Controls (DDTC) within the Department of State maintains a list of “Debarred Parties,” who are denied the privilege of participating directly or indirectly in the export of defense articles, technical data or services.
- Nonproliferation sanctions. The State Department maintains several lists of persons sanctioned under various statutes related to weapons nonproliferation.