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OFAC SDN List: What it is and How to Handle a Match

The SDN List is the most important sanctions list any business processing USD transactions must screen against. Transacting with an SDN-listed party can trigger a civil penalty of up to $377,700 per violation.

This article covers what the SDN list is, who is on it, and what to do when you get a hit.

What is the SDN list?

The SDN list, short for Specially Designated Nationals and Blocked Persons List, is the primary sanctions list maintained by OFAC, a division of the US Department of the Treasury. First published in 1994, it currently contains over 17,000 entries.

Its purpose is to identify parties subject to full blocking sanctions. Blocking means all assets must be frozen and all transactions are prohibited.

There is no partial compliance; a confirmed SDN match requires immediate action regardless of transaction size or business relationship.

Note: OFAC maintains several other sanctions lists beyond the SDN list, each with different legal obligations. The SDN list carries the strictest consequences of all of them.

Who is on the SDN list?

The SDN list includes individuals, companies, vessels, aircraft, and cryptocurrency wallet addresses.

Each entry is tagged with the sanctions program it falls under, which tells you why they were designated and what rules apply to dealings with them.

Designations happen through OFAC investigation, Executive Order, or Act of Congress. There is no advance notice. A counterparty can be added to the SDN list any time, without warning. The most active programs driving designations are:

  • IRAN: individuals and entities supporting Iran's government, military, and nuclear program
  • CUBA: Cuban government officials and state-owned entities
  • RUSSIA: oligarchs, defense sector entities, and government officials
  • SDGT: global terrorists and their financial networks
  • NPWMD: weapons of mass destruction proliferators

How to screen against the SDN list

Screening against the SDN list follows the same process as any OFAC sanctions screening.

One critical point: the SDN list alone is not enough. The Consolidated Sanctions List must be screened alongside it, as a party can be on one without appearing on the other.

For a full breakdown and how to automate it, see our OFAC screening guide. To screen both lists in one API call, see SanctionsLookup.

How to handle an SDN match

An SDN match triggers a legally required sequence of actions under 31 CFR Part 501. Here is the process.

Step 1 — Verify the match

Over 95% of SDN matches are false positives.

Compare the match against the full SDN entry: name, all listed aliases, date of birth, nationality, and any unique identifiers such as passport numbers, national IDs, or wallet addresses.

A match on a unique identifier is strong evidence of a true hit. A name-only match with no supporting attributes is a strong indicator of a false positive.

Document your reasoning either way and refer to official guidance on assessing matches. If confirmed, proceed immediately to step 2.

Step 2 — Block the transaction

Stop the transaction immediately. All blocked funds must be placed into an interest-bearing account from which only OFAC-authorized debits may be made. Do not return funds to the sender.

You may notify the customer their funds are blocked and that they can apply for unblocking through OFAC's license application process. Releasing blocked property without OFAC authorization is a separate violation.

Important nuance: in most cases OFAC regulations allow debiting blocked accounts for normal service charges, but this varies by sanctions program. Check the specific program rules before debiting anything.

Step 3 — Report to OFAC

Blocking and reject reports must be submitted to OFAC within 10 business days of the action. File reports through the OFAC Reporting System. Include a copy of the original transfer instructions.

If you cannot use the online system, contact OFAC directly via the OFAC Compliance Hotline or email at [email protected].

Step 4 — File annual reports

All blocked assets held as of June 30 must be reported annually to OFAC by September 30, using form TD F 90-22.50, filed through the OFAC Reporting System or emailed to [email protected]. Missing the September 30 deadline is itself a separate violation.

Blocked assets stay frozen until one of three things happens:

  • OFAC issues a specific license authorizing release
  • OFAC removes the party from the SDN list
  • The relevant sanctions program is terminated

There is no automatic release and no expiry date on blocked property.

Penalties

Missing any of these steps, whether failing to block, late reporting, or releasing funds without authorization, carries the same strict liability standard as the original violation. Intent is irrelevant.

A single failure can trigger a civil penalty of up to $377,700 per violation or twice the transaction value. For a full breakdown of enforcement and penalty ranges, see our OFAC penalties guide.

The 50 Percent Rule

Any entity 50% or more owned by an SDN is itself treated as sanctioned, even if it does not appear on the SDN list.

Ownership is aggregated across multiple SDN owners. Two SDNs each owning 26% triggers the rule. This applies to both direct and indirect ownership chains.

The practical implication: you can screen every name correctly and still process a prohibited transaction. Standard name screening does not catch this. You need beneficial ownership data to identify these entities.

Three things to check beyond the name:

  • Who owns the entity and in what percentage
  • Whether any owner is themselves owned or controlled by an SDN
  • Whether combined SDN ownership across multiple parties reaches 50%

For a full breakdown see our OFAC 50 Percent Rule guide.

FAQ

What does SDN stand for?

SDN stands for Specially Designated Nationals and Blocked Persons. It refers to individuals, companies, and other entities designated by OFAC as subject to full blocking sanctions under US sanctions law.

How often does OFAC update the SDN list?

OFAC updates the SDN list on no fixed schedule. Updates occur whenever new designations, removals, or modifications are made, which can happen multiple times a week. During active geopolitical events, updates can occur multiple times in a single day.

How often does OFAC mail the SDN list?

OFAC does not mail the SDN list. The list is published electronically and updated in real time on OFAC's website. It is available for download as XML and CSV files at any time through the Sanctions List Service.

What does SDN stand for in banking?

In banking, SDN stands for Specially Designated Nationals and Blocked Persons. A banking customer or counterparty who matches an SDN entry must have their assets frozen and all transactions halted. Banks are required to report blocked transactions to OFAC within 10 business days.

Who do blocked funds on the SDN list belong to?

Blocked funds belong to the sanctioned party but cannot be accessed, returned, or released without OFAC authorization. The institution holding the funds must place them in an interest-bearing blocked account and report them to OFAC annually until OFAC instructs otherwise.

Why does OFAC add individuals to the SDN list?

OFAC adds individuals to the SDN list when they are determined to pose a threat to US national security, foreign policy, or the economy. Designations are made under specific sanctions programs. For example, individuals supporting terrorist networks are designated under SDGT, while those supporting Iran's government are designated under the Iran sanctions program.

What is the purpose of the OFAC SDN list?

The purpose of the OFAC SDN list is to identify parties that US persons and businesses are prohibited from transacting with. By publishing the list, OFAC enables businesses to screen counterparties and avoid prohibited transactions before they occur.

What is a Specially Designated National?

A Specially Designated National is an individual, company, vessel, aircraft, or other entity that OFAC has designated as subject to full blocking sanctions. Their assets must be frozen, all transactions with them are prohibited, and US persons are legally required to screen against the SDN list to avoid dealing with them.

What is the OFAC Compliance Hotline number?

The OFAC Compliance Hotline phone numbers 1-800-540-6322 and 202-622-2490 were retired on December 31, 2024. OFAC now handles compliance queries exclusively through its online OFAC Compliance Hotline platform.

Does the OFAC SDN list apply to real estate transactions?

Yes. Buying, selling, leasing, or financing property involving an SDN-listed party is prohibited. Real estate professionals, title companies, and mortgage lenders are all expected to screen parties before closing. The 50 Percent Rule also applies. A property owned by a company majority-owned by an SDN is blocked property even if no SDN name appears on the transaction documents.