Sanctions Evasion Reference

What are sanctions and how do they actually work?

Sanctions are legal restrictions on dealings with a named person, entity, sector or country, imposed by a state or international body and enforced against anyone within that authority's jurisdiction.

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2026-08-20

Sanctions are restrictions on economic and financial dealings, imposed to change behaviour without using force. They run from freezing one person’s bank account to prohibiting most trade with a country.

The three things that determine whether a rule applies to you

Who imposed it. A US measure binds US persons and, in many programmes, transactions touching the US financial system. An EU measure binds EU persons and conduct in EU territory. A UN measure obliges member states to legislate, and it is the national legislation that binds you.

What it restricts. Some measures prohibit dealings with named parties. Some restrict particular activities in a sector. Some restrict goods by their origin. Some restrict services. These are different questions with different answers, and screening a counterparty against a list answers only the first.

Where you are. The same transaction can be prohibited for a bank in New York, permitted for its client in Dubai, and prohibited again for that client’s insurer in London.

That last point is the one that generates most of the material on this site. Almost every technique described here exists to exploit a seam between two of those three variables.

Why the money matters more than the law

A restriction is only as effective as the chokepoint it can be enforced at. The reason US sanctions have outsized effect is not that US law is unusually strict but that most international trade settles in dollars, and dollar clearing runs through institutions within US jurisdiction.

Understanding that explains what follows: why payment routing is such a central technique, why the price cap works through insurers and shipowners rather than through customs, and why so much evasion effort goes into keeping a transaction out of a particular currency.

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Terms used on this page

  • Sanctions — Restrictions imposed by a state or international body on dealings with a named person, entity, sector or country, enforced against anyone within that authority's jurisdiction.
  • Designation — The formal act of adding a person, entity, vessel or aircraft to a sanctions list, which triggers the restrictions attached to that programme.
  • Blocking — Freezing property and interests in property of a designated person that come within a jurisdiction, so it cannot be transferred, paid, withdrawn or otherwise dealt in.
  • Secondary sanctions — Measures that threaten non-US persons with loss of access to the US market or financial system if they engage in specified dealings with sanctioned parties.
  • Export control — A licensing regime that restricts the export, re-export or transfer of specified goods, software and technology by reference to the item, the destination and the end use.

Sources

  1. Sanctions Programs and Country Information. U.S. Department of the Treasury, Office of Foreign Assets Control, 2026.
  2. Sanctions (restrictive measures). European Commission, Directorate-General for Financial Stability, 2026.
  3. United Nations Security Council Consolidated List. United Nations Security Council, 2026.
  4. Financial sanctions: consolidated list of targets. HM Treasury, Office of Financial Sanctions Implementation, 2026.