OFAC is the US Treasury unit that maintains the sanctions lists, above all the SDN list. The general federal grant rules contain no requirement to screen partners against those lists: it comes from sanctions law itself and from the terms of the specific award, so read your own agreement.
- In grant rules
- No requirement
- SDN entries
- ~19 thousand
- Liability
- Strict, no intent needed
- Record retention
- 10 years
The Office of Foreign Assets Control administers US economic sanctions. Its principal list is the SDN list – Specially Designated Nationals and Blocked Persons: their assets are blocked and dealings by US persons prohibited. It holds roughly nineteen thousand entries and is updated on no fixed schedule, in practice several times a month.
The core misunderstanding: this requirement is not in the grant rules
Verified by full-text search of the general federal financial assistance rules: the words OFAC, SDN, terrorism and IEEPA do not appear there once.
What those rules do contain is a different system: checking the exclusions list in SAM.gov. Different agency, different legal basis, different consequence – ineligibility for federal procedures rather than blocked assets. The two should not be conflated.
So where does the obligation come from
From the law itself – for US persons, sanctions rules apply regardless of any grant.
From the general requirement in the rules to comply with US law and the terms of the award.
From the terms of the specific award – historically the operative channel. USAID's standard provisions carried a clause prohibiting transactions with persons under OFAC or UN sanctions, requiring it to be passed into every subaward, and making breach grounds for unilateral termination.
Why this matters practically for a non-US organisation
A Ukrainian NGO is generally not a "US person" for sanctions purposes. Direct OFAC jurisdiction over it is limited – arising through US-origin goods, dollar payments through US banks, or causing a US person to violate.
So what binds you most tightly is the contract, not your status. Read the terms of your award, not the general rules.
And an important 2026 change: the State Department's current standard terms contain no mention of sanctions, OFAC or the SDN list – that requirement has moved to bureau level and to individual calls. Ukraine is not among the countries for which formal applicant vetting is required.
The trap that matters more than the lists
The 50 Percent Rule: an entity owned 50% or more in the aggregate by blocked persons – directly or indirectly – is itself blocked, even if it appears on no list.
In practice your bank, landlord or logistics contractor can be blocked while never appearing in a name screen. Ownership diligence is required, not just list matching.
The second typical failure OFAC names itself is transliteration: filters that do not account for alternative spellings. For a Ukrainian context this is acute – the same name can be written several ways in Latin script.
Liability and record-keeping
Civil liability is strict: no intent is needed. The maximum civil penalty under the principal sanctions statute is the greater of about $377,000 or twice the transaction amount (January 2025 figures; no inflation adjustment was made in 2026). Criminal liability requires wilfulness and reaches $1m or 20 years.
Note the two different retention periods: general grant rules require three years, sanctions rules ten – extended from five only in 2025.
Frequently asked questions
Do we have to screen every beneficiary of the assistance?
As a rule, no. The standard USAID certification explicitly took final beneficiaries of humanitarian assistance – recipients of food, medicine, shelter – outside the requirement, except where the organisation knew or had reason to believe that a particular person was under sanctions. The same applied to ordinary commercial payments. But the exact terms have to be checked in your own award.
Our counterparty is not on the list. Is that enough?
No. Under the 50 per cent rule, a company is also treated as blocked if sanctioned persons together own half or more of it, even if the company itself is not listed. So you need to check the ownership structure, not just match names.
How long do records have to be kept?
There are two different periods here, and the longer one governs: the general grant rules require three years, while sanctions law requires ten. The period was extended from five to ten years in 2025.
Official materials
- Document · OFAC, US Treasury Sanctions List Service Current sanctions lists and the service for retrieving them
- Document · OFAC, 2019 A Framework for OFAC Compliance Commitments The five components of a compliance programme and the common root causes of failure
- Document · OFAC, 2014 Revised Guidance on Entities Owned by Blocked Persons The 50 per cent rule, central to screening counterparties
- Document · eCFR 2 CFR 200.332 – Requirements for pass-through entities What the grant rules actually require: checking exclusions in SAM.gov
Sources
- 2 CFR Part 200 (перевірено суцільним пошуком) ecfr.gov · checked 27.07.2026
- OFAC Framework for Compliance Commitments ofac.treasury.gov · checked 27.07.2026
- OFAC Revised Guidance – 50 Percent Rule ofac.treasury.gov · checked 27.07.2026
Data current as of 27.07.2026. Verify the terms with the donor’s official portal before applying.
Updated 27.07.2026 · Reviewed by: GetGrant editorial team
