pc
nid 91650
Mar 31, 2026
pdonofrio@vixio.com
US Track 2
Ministry of Finance
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2036 charsUnited States Treasury Department Issues Sanctions Advisory on Sham Transactions and Evasion
On March 31, 2026, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a sanctions advisory providing guidance on sham transactions used to evade sanctions compliance.
The advisory highlights sanctions risks associated with sham transactions and identifies key factors that organisations should consider when evaluating whether property may be subject to a sham transaction. The guidance is designed to assist financial institutions, businesses, and other entities in identifying and preventing transactions that attempt to circumvent OFAC sanctions programmes. By clarifying the characteristics of sham transactions, OFAC aims to strengthen sanctions enforcement and reduce the risk of sanctions evasion across regulated sectors. The advisory is relevant to all entities subject to OFAC jurisdiction, including banks, money services businesses, investment firms, and other financial service providers that handle international transactions or maintain relationships with sanctioned jurisdictions or individuals.
The advisory serves as a resource for compliance professionals to enhance their transaction monitoring and due diligence procedures. It provides practical guidance on red flags and risk indicators that may suggest a transaction is designed to evade sanctions rather than serve a legitimate commercial purpose. This guidance reinforces OFAC's commitment to combating sanctions evasion and supports regulated entities in meeting their compliance obligations under U.S. sanctions law.
The advisory is available on OFAC's website and complements existing OFAC resources, including frequently asked questions, enforcement information, and general licences. Entities should review the advisory and incorporate its findings into their sanctions compliance programmes.
**Reference:**
Office of Foreign Assets Control, U.S. Department of the Treasury. Publication of Sanctions Advisory: Guidance on Sham Transactions and Sanctions Evasion. March 31, 2026. Available at: https://ofac.treasury.gov
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1483 charsUS Office of Foreign Assets Control Issues Sanctions Advisory on Sham Transactions and Evasion
On March 31, 2026, the US Office of Foreign Assets Control (OFAC) issued a sanctions advisory providing guidance on sham transactions used to evade sanctions compliance.
The advisory highlights sanctions risks associated with sham transactions and identifies key factors that organizations should consider when evaluating whether property may be subject to a sham transaction. It is designed to assist financial institutions in identifying and preventing transactions that attempt to circumvent OFAC sanctions programs.
Key topics of the adisory include:
Identification of evasion tactics. Broadly outlining how illicit actors use shell companies, layered financial transfers and falsified shipping or trade documentation to hide the true origin or destination of funds.
Enhanced due diligence. Emphasizing that standard screening is often insufficient for modern evasion techniques, requiring institutions to look beyond immediate counterparty names to understand underlying economic realities of a transaction.
Sector-specific risks. Highlighting heightened risks in high-velocity payment environments where automated systems may fail to detect subtle red flags, such as inconsistent maritime data or unexpected third-party intermediaries.
Compliance expectations. Reinforcing that willful blindness or failing to act on clear discrepancies can lead to significant enforcement actions, regardless of whether a transaction appears technically compliant with automated filters.