Authored by Noemi Cădariu, Managing Associate and Roman Bradu, Managing Partner

In practice, the analysis of risks posed by international sanctions is often reduced to a seemingly simple question: Can a transaction be conducted with a specific person, or not? In most cases, the verification process begins with the OFAC lists and, at times, ends there as well. However, such an approach overlooks the fact that exposure to sanctions does not arise exclusively from direct dealings with a designated person but, more often than not, results as an indirect consequence of an insufficiently verified chain of ownership.

The mere fact that a person does not directly participate in a transaction is not sufficient to rule out the risk of sanctions. The risk may arise even when a person does not carry out the prohibited transaction themselves but contributes to its execution by another party through financing, approval, guarantee, coordination, advice, or intermediation. This is the scope of the concept of facilitation, a central notion in the architecture of U.S. sanctions, but one that remains insufficiently analyzed in local practice and, consequently, is frequently underestimated by companies.

Conduct that, viewed in isolation, may seem incidental—such as approving a transaction, providing advice, processing a payment, or assuming a guarantee—may, under certain circumstances, constitute a form of prohibited participation under the regulations administered by OFAC.

For practitioners and companies in non-U.S. jurisdictions, the analysis must be conducted on two distinct levels. On the one hand, it is necessary to understand the facilitation prohibition applicable to U.S. persons, and on the other hand, it is necessary to identify the legally distinct mechanisms through which a non-U.S. person may incur its own exposure to U.S. sanctions.

 i.    What Does “Facilitation” Really Mean in OFAC Regulations?

The classic formulation of the prohibition is found in the Iranian sanctions regime. According to this regime, no U.S. person, wherever located, may approve, finance, facilitate, or guarantee a transaction by a foreign person when that transaction would be prohibited if it were conducted by a U.S. person or within the United States.[1] The central idea is deceptively simple: a U.S. person is prohibited from doing indirectly what they cannot do directly.

This provision is not unique to the Iranian program. OFAC treats facilitation as a cross-cutting principle of IEEPA-based embargo programs. Where the text expressly provides for it, the prohibition is explicit; where the text is silent, OFAC considers it implicit, based on the premise that facilitating a transaction by a foreign person is prohibited whenever that transaction would be prohibited if it were carried out directly by a U.S. person.[2] In practice, the absence of an express mention does not equate to authorization.

The range of covered conduct is broad, and the most detailed interpretive provision—which remains from the Sudanese regime even though it was formally removed from the regulations in 2018—describes facilitation as any unlicensed action by a U.S. person that assists or supports the targeted commercial activity. The same provision also sets the lower threshold, namely that purely clerical or reporting activities that do not in themselves support the transaction are not prohibited. Reporting the results of a subsidiary’s trade is permitted; financing or insuring that trade constitutes facilitation.[3]

The line extends to actions that a practitioner might consider mere business courtesies. Referring a business opportunity to a foreign person, when the referred transaction would be prohibited if carried out by the U.S. person, is itself prohibited.[4] Consequently, the very concept of facilitation becomes an elastic notion that can, in principle, encompass almost any associated action—no matter how indirect or through how many layers—linked to a sanctioned target.

ii.    Counterfactual Analysis and Implicit Facilitation

Precisely because it is so broad, the prohibition also has a limiting mechanism that, however, functions counterintuitively, in the opposite direction. A transaction constitutes prohibited facilitation only if it is a transaction in which the U.S. person could not have engaged on its own without a license. In other words, the question is not merely what the U.S. person did, but what they would have been permitted to do had they been the contracting party. When the underlying transaction would have been permitted to a U.S. person—either because it is exempt or because it is authorized by a general license—facilitating it is not prohibited.[5] Simply put, if you can do it on your own behalf, you can also act as an intermediary.

The practical consequence is that, in some cases, the legal characterization depends on a counterfactual analysis: not of the transaction that actually takes place, but of the hypothetical one in which the U.S. person would have been directly involved. This nuance is essential when drafting legal opinions. A conclusion regarding prohibited facilitation cannot be reached without first reconstructing the regime applicable to the transaction had it been conducted directly, including the relevant general licenses and their purpose.

iii.    The U.S. Nexus: When Jurisdiction Applies

The facilitation prohibition revolves around the concept of a U.S. person. This includes any U.S. citizen, lawful permanent resident, entity organized under U.S. law—including its foreign branches (hence the potential difficulties arising within the European Union and Romania)—as well as any person physically present in the United States.[6] Around this core lies the U.S. nexus—that is, the set of connecting factors that trigger the application of OFAC sanctions: the involvement of a U.S. person, the conduct of part of the transaction on U.S. territory, the use of U.S.-origin goods or technology, and—of overwhelming practical importance—the clearing of dollar payments through the U.S. banking system.

Since nearly all dollar transfers are settled through banks located in the United States, a payment in dollars to or from a sanctioned party may trigger the application of U.S. sanctions even in the absence of any other connection to the United States.[7] The currency of payment, a detail often treated as a commercial matter, thus becomes a veritable jurisdictional trigger.

iv.    How do non-U.S. persons create exposure?

This is where one of the most common misunderstandings arises, including in Romanian practice. The prohibition on facilitation, strictly speaking, applies to U.S. persons; thus, a Romanian company or its client will not, as a rule, be directly subject to this prohibition, as long as they are not U.S. persons.

However, this does not preclude a non-U.S. person from being subject to the sanctions regime. Such exposure may result from other legal rules and mechanisms, distinct from facilitation, but which are often improperly grouped together in practice under the same term.

The first avenue is the facilitation of a violation: non-U.S. persons are prohibited from inducing or conspiring to induce U.S. persons to violate sanctions, as well as from engaging in conduct that circumvents or avoids a violation.[8] The typical scenario, as recognized by OFAC, BIS, and the DOJ in their joint compliance guidance specifically addressed to non-U.S. persons in March 2024, involves routing a prohibited payment through the U.S. financial system, thereby inducing a U.S. bank—whether knowingly or unknowingly—to process a blocked transaction. This also includes obscuring or omitting references to a sanctioned party in order to induce a U.S. bank to execute a transaction that it would otherwise have rejected.[9]

The second avenue is the anti-evasion clause in the executive orders themselves: in the case of Russia, Executive Order 14024 prohibits any transaction that evades, circumvents, is intended to evade or circumvent, results in a violation of, or attempts to violate the order’s prohibitions, as well as any conspiracy formed for th .[10] Unlike the classic facilitation provision, this clause is not expressly limited to U.S. persons, and its broad wording also captures non-U.S. conduct aimed at undermining the regime.

The third avenue—and the one most relevant to institutions—is secondary sanctions: these affect non-U.S. persons even in the absence of any U.S. nexus. For example, Executive Order 14114 of December 2023 amended Executive Order 14024 and authorized OFAC to impose sanctions on foreign financial institutions that have conducted or facilitated significant transactions for designated persons in the targeted sectors, or involving Russia’s military-industrial complex, with sanctions ranging from restrictions on correspondent accounts to complete freezing.[11]

However, OFAC does not treat as circumvention or evasion the efforts of non-U.S. persons to comply by replacing sanctioned suppliers, service providers, or financial institutions with non-sanctioned partners.[12] The legitimate restructuring of a supply chain for compliance purposes is therefore not prohibited conduct. The distinction between evading sanctions and complying with them by bypassing the sanctioned party is subtle but crucial, and must be explicitly upheld when a company selects its contractual partners.

v.    The Distinction from Direct Transactions

Understanding the concept depends on a clear distinction: a direct transaction is one in which the U.S. person, or an operation with a U.S. nexus, is itself a party to the prohibited relationship. Facilitation covers the situation in which the U.S. person is not a party but facilitates the transaction: by approving, financing, guaranteeing, or supporting it. The very rationale for the concept is to close the loophole whereby one could argue, “I did not transact with the sanctioned party; rather, it was my foreign subsidiary, my consultant, or the bank through which the payment passed.”

For this reason, for a non-U.S. person, the risk becomes real the moment a U.S. element appears in the structure: an employee or officer with U.S. citizenship or residency who approves the transaction, a U.S. subsidiary or parent company, a U.S. consultant providing guidance, or a payment in dollars. At that point, two worlds that seemed separate—that of the prohibition on facilitation and that of non-U.S. exposure—intersect, and the seemingly neutral action of a U.S. person within the structure can turn an otherwise peripheral transaction into a violation.

vi.    Case Studies: Lawyers and Consultants, Banks, Freight Forwarders/Shipping Companies

Enforcement practice shows how little professional title matters and how much the role played in the operation matters.

Banks: The archetypal case remains BNP Paribas. In 2014, the French bank reached a global settlement of approximately $8.9 billion, of which the OFAC component was $963 million—at the time, the largest OFAC settlement. The sanctioned conduct consisted of concealing, removing, omitting, or obscuring references to sanctioned parties in 3,897 transactions routed to or through U.S. banks between 2005 and 2012.[13] The lesson for a non-U.S. bank is clear: no connection to the United States beyond settlement in U.S. dollars was necessary for U.S. regulations to apply, and the technique of concealing the parties transformed the bank from a mere payment channel into a participant in the violation.

Consultants: The Schlumberger Oilfield Holdings case, settled in 2015 with a $232 million agreement, was explicitly built on the theory of facilitation. The alleged conduct was not a direct transaction with Iran or Sudan, but rather the approval of expense reports and the provision of consulting and business guidance for operations conducted in those jurisdictions.[14] In other words, internal support and expert advice, provided from a U.S.-linked position, were sufficient to trigger liability.

Lawyers/gatekeepers: In 2025, OFAC reached a settlement of $215,988,868 with GVA Capital, a San Francisco-based venture capital fund that had managed the assets of a Russian oligarch designated as an SDN. The significance of the case, beyond the amount involved, lies in the message it conveys: in its press release, OFAC emphasized the role of gatekeepers, citing as examples investment professionals, accountants, lawyers, and providers of company and trust formation services, and warned them to remain vigilant against the risk that sanctioned parties or their representatives might use professional services to conceal a financial interest or to evade sanctions.[15] For the legal profession, the warning is hard to ignore: structuring, representing, or managing assets for the benefit of a sanctioned party can result in personal liability.

The logistics sector offers two recent examples. In 2022, the Australian freight forwarding company Toll Holdings was sanctioned by OFAC for deficiencies in its compliance program regarding complex international transactions, in an action viewed at the time as a warning to foreign corporations.[16] In 2025, the Houston-based freight forwarder Fracht FWO Inc. agreed to a settlement of $1,610,775 for its involvement with a Venezuelan government- d airline subject to sanctions and an aircraft operated by Iran’s Mahan Air, in connection with the Venezuela, Iran, proliferation, and global terrorism programs; The conduct was characterized as serious and not voluntarily disclosed.[17] The common message from these two cases is that a transportation service provider cannot hide behind its operational role: arranging, subcontracting, or settling a shipment involving a sanctioned party is, in OFAC’s view, a form of support for a prohibited transaction.

vii.    Relevance for Practice in Romania

For a Romanian company and its clients, the risk map looks different from that of a U.S. person, but it is no less complex. The classic prohibition on facilitation affects us indirectly, to the extent that the client’s structure includes a U.S. element. The main avenues of exposure remain the determination of a violation by a U.S. person—particularly through payments in U.S. dollars—the anti-circumvention clause in applicable executive orders, and, for financial institutions, the strict secondary sanctions introduced in the Russian context.

In the context of designations in the critical energy sector under Executive Order 14024, this means that the analysis cannot stop at the question of whether the client is transacting directly with a designated entity. One must also examine the currency and payment channel, the presence of any U.S. person in the decision-making structure, whether the entity is a financial institution exposed to secondary sanctions, and the sometimes fine line between a permissible compliance restructuring and a restructuring that could be construed as circumvention. The concept of facilitation is therefore not a mere curiosity of U.S. law, but rather the framework through which every transaction must be analyzed when a sanctioned party is present anywhere—no matter how distant—in the transaction chain.

If there is one conclusion to take away, it is that distance from the sanctioned party does not, in and of itself, equate to legal certainty. Between transacting directly and having no connection at all lies a vast territory, in which approving, financing, advising, transporting, or settling payments may be sufficient. Under this umbrella, merely refraining from action—in the sense of not being a direct party—is not enough.

[1]31 C.F.R. § 560.208 (Iranian Transactions and Sanctions Regulations); 64 FR 20171, April 26, 1999.

[2]OFAC’s position, as applied across the board to embargo programs based on the IEEPA: facilitating a transaction by a foreign person is prohibited if that transaction would be prohibited when conducted directly by a U.S. person; this prohibition is explicit in the embargo programs and implied where it is not expressly stated. See The OFAC/Export Control Evasion and Facilitation Prohibitions, ACC Docket, April 8, 2021.

[3]31 C.F.R. § 538.407 (Sudanese Sanctions Regulations, provision removed from the C.F.R. in 2018, which remained OFAC’s most detailed explanation of the concept of facilitation): purely clerical or reporting activities that do not support the commercial or financial transaction do not constitute prohibited facilitation; reporting the results of a subsidiary’s trade is not prohibited, whereas financing or insuring that trade is.

[4]31 C.F.R. § 560.417(b): A U.S. person may not refer a business opportunity to a foreign person if the referred transaction would be prohibited if conducted by the U.S. person.

[5]A transaction constitutes prohibited facilitation only if it is a transaction in which U.S. persons could not engage without a license, which in some cases requires a counterfactual analysis of the transaction. See the OFAC interpretive note associated with the facilitation provisions (e.g., 31 C.F.R. § 542.210, Syria, and equivalents).

[6]31 C.F.R. § 560.314: The term “United States person” means any U.S. citizen, lawful permanent resident, entity organized under the laws of the United States (including foreign branches), or any person located in the United States.

[7]Watson Farley & Williams, US Sanctions 101: Since nearly all transfers in U.S. dollars are cleared through U.S. banks, a payment in dollars to or from an SDN or a sanctioned jurisdiction may trigger sanctions even in the absence of any other U.S. nexus.

[8]OFAC, Frequently Asked Question 1029: Non-U.S. persons are prohibited from inducing or conspiring to induce U.S. persons to violate sanctions, as well as from engaging in conduct that circumvents or evades a violation of OFAC sanctions.

[9]Tri-Seal Compliance Note, jointly issued by OFAC, BIS, and the DOJ on March 6, 2024, specifically addressed to non-U.S. persons; the scenarios cited include routing a prohibited payment through the U.S. financial system, causing a U.S. bank to process it, and obscuring or omitting references to a sanctioned party.

[10]Executive Order 14024 of April 15, 2021, Secs. 4(a) and 4(b): Any transaction that circumvents, evades, is intended to circumvent or evade, results in a violation of, or attempts to violate any of the prohibitions of the order is prohibited, as is any conspiracy formed for that purpose. Reenacted in 31 C.F.R. Part 587 (Russian Harmful Foreign Activities Sanctions Regulations).

[11]Executive Order 14114 of December 22, 2023, which amends E.O. 14024 by introducing a new Sec. 11(a), authorizing OFAC to impose secondary sanctions on foreign financial institutions that have conducted or facilitated significant transactions for persons designated under E.O. 14024 in the technology, defense, construction, aerospace, or manufacturing sectors, or involving Russia’s military-industrial base. Sanctions may consist of CAPTA restrictions or a complete freeze. See FAQs 1146–1151.

[12]OFAC does not consider efforts by non-U.S. persons to comply with the sanctions by replacing sanctioned suppliers or service providers (including financial institutions) with unsanctioned persons to be circumvention or evasion. See OFAC’s FAQs on Russian Harmful Foreign Activities Sanctions.

[13]U.S. Department of the Treasury, OFAC, Settlement Agreement with BNP Paribas SA, June 30, 2014, press release jl2447: $963 million OFAC component of a global settlement of approximately $8.9 billion; the conduct consisted of concealing, removing, omitting, or obscuring references to sanctioned parties in 3,897 transactions routed to or through U.S. banks between 2005 and 2012. BNP Paribas pleaded guilty before the DOJ.

[14]Schlumberger Oilfield Holdings Ltd., settlement with the DOJ in 2015, $232 million, based on the theory of facilitation: approving expense reports and providing business advice and guidance for operations in Iran and Sudan.

[15]OFAC, settlement with GVA Capital Ltd., 2025, $215,988,868: a San Francisco-based venture capital fund that managed the assets of Russian oligarch Suleiman Kerimov, designated as an SDN. In its press release, OFAC emphasized the role of gatekeepers, citing investment professionals, accountants, lawyers, and providers of company and trust formation services as examples.

[16]OFAC, settlement with Toll Holdings Limited, April 25, 2022: an Australian freight forwarding and logistics company sanctioned for deficiencies in its compliance program regarding complex international transactions.

[17]OFAC, settlement with Fracht FWO Inc., September 3, 2025, $1,610,775: a Houston-based freight forwarder sanctioned for involving a blocked Venezuelan state-owned airline and an aircraft operated by Mahan Air (Iran) in programs related to Venezuela, Iran, WMD proliferation, and global terrorism; conduct classified as serious and not voluntarily disclosed.