Sanctions Evasion Reference

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.

reviewed

2026-08-20

Primary sanctions bind people within the imposing state’s jurisdiction. Secondary sanctions reach outside it, by making conduct that is lawful where it occurs a trigger for being cut off from the imposing state. A bank in a third country that processes significant transactions for a designated party may itself be designated, or lose its US correspondent account.

Because the threatened penalty is exclusion rather than prosecution, secondary sanctions work through the risk appetite of foreign institutions rather than through foreign courts. A designation entry carrying the words “secondary sanctions risk” is a signal aimed at exactly that audience.

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 are third-country bank accounts and how are they used? — Holding accounts in a jurisdiction unconnected to the restricted party, the goods or the contract, so that payments reach and leave the restricted economy without ever appearing to touch it.
  • 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

  • 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.
  • Correspondent banking — An arrangement in which one bank holds an account for another and provides payment and other services on its behalf, usually to give it access to a foreign currency.
  • Designation — The formal act of adding a person, entity, vessel or aircraft to a sanctions list, which triggers the restrictions attached to that programme.

Sources

  1. Frequently Asked Questions. U.S. Department of the Treasury, Office of Foreign Assets Control, 2026.
  2. Sanctions Programs and Country Information. U.S. Department of the Treasury, Office of Foreign Assets Control, 2026.

All glossary terms