Sanctions Advisory on Sham Transactions and Sanctions Evasion

OFAC Recent Actions

Published March 31st, 2026

Detected March 31st, 2026

Summary

OFAC published a sanctions advisory on sham transactions and sanctions evasion. The guidance highlights risks arising from sham transactions used to evade sanctions and identifies factors to consider when evaluating whether property may be the subject of a sham transaction. This advisory applies to financial institutions and parties engaged in international trade.

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What changed

OFAC issued a sanctions advisory on March 31, 2026, addressing sham transactions used to evade U.S. sanctions. The advisory highlights specific sanctions risks associated with sham transactions and identifies factors that OFAC will consider when evaluating whether property may be the subject of a sham transaction.\n\nCompliance officers at financial institutions and companies engaged in international trade should review this guidance to enhance their sanctions compliance programs. The advisory provides indicators that may signal sham transaction structures designed to evade sanctions. Companies should assess whether their current screening and due diligence procedures adequately address these identified risks. No specific compliance deadline is stated, but immediate review of existing controls is advisable given the enforcement implications of sanctions evasion.

What to do next

Review the advisory to understand factors OFAC considers when identifying sham transactions
Assess current sanctions screening and due diligence procedures against the indicators highlighted in the guidance
Update compliance controls if gaps exist in detecting transaction structures designed to evade sanctions

Penalties

Civil penalties for sanctions violations can reach $1,000,000 per violation or twice the transaction amount; criminal penalties may apply for willful violations

Source document (simplified)

Publication of Sanctions Advisory: Guidance on Sham Transactions and Sanctions Evasion

03/31/2026 The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing a sanctions advisory to highlight sanctions risks arising from sham transactions used to evade sanctions and to identify factors to consider when evaluating whether property may be the subject of a sham transaction.