Sanctions Evasion Reference

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.

reviewed

2026-08-20

Sanctions are legal restrictions on economic and financial dealings, imposed to change the behaviour of a government, an organisation or an individual without using force. They range from a freeze on one person’s bank account to a comprehensive embargo on trade with a whole country.

The important practical point is jurisdictional. A sanction imposed by the United States binds US persons, transactions touching the US financial system, and in some programmes non-US parties dealing with designated persons. A sanction imposed by the European Union binds EU persons and conduct within EU territory. The same company can therefore be prohibited from one counterparty and free to deal with another, depending on where it sits and which currency it settles in. Most evasion techniques on this site exist to exploit exactly that seam.

Where this term is used

  • How is correspondent banking used to evade sanctions? — Using a chain of banks that each know only their own customer, so that a payment for a restricted party reaches a currency it could not access directly, without any bank in the chain seeing the whole transaction.
  • What is a front company? — A front company is a business that trades normally but exists largely to hide another party's involvement in its transactions. The real activity is the cover; the concealed party is the point.
  • What is third-country transshipment? — Routing restricted goods through an intermediate country so that the shipment reaching the restricted destination appears to originate somewhere the exporter would have supplied without question.

Related terms

  • Designation — The formal act of adding a person, entity, vessel or aircraft to a sanctions list, which triggers the restrictions attached to that programme.
  • Asset freeze — The prohibition on dealing with funds or economic resources owned, held or controlled by a designated person, and on making funds available to them.
  • 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.

All glossary terms