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ARTICLE · 31 MARCH 2026

OFAC Issues Advisory Warning On Sham Transactions

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On March 31, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an advisory on sham transactions, highlighting the compliance risks financial institutions...

United StatesGovernment, Public Sector
Ryan F. Sullivan
Ryan F. Sullivan
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On March 31, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an advisory on sham transactions, highlighting the compliance risks financial institutions must navigate when facilitating international property transactions.

What is a Sham Transaction?

OFAC defines a “Sham Transaction” as one in which a blocked person, typically operating through proxies or intermediaries, effectuates the transfer or concealment of a continuing interest in property, without genuinely extinguishing said interest, in an attempt to evade U.S. sanctions. In other words, sham transactions are those in which an individual appears to relinquish property on paper but remains effectively in control of it.

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