What is the Foreign Sanctions Evaders List?

The Foreign Sanctions Evaders (FSE) List is a sanctions list maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). It includes individuals and entities found to have violated or attempted to evade U.S. sanctions, particularly those related to Iran and Syria.

While those on the FSE List are not automatically subject to asset blocking, U.S. persons are generally prohibited from engaging in any transactions or dealings with them. 

The list is designed to expose and restrict those who seek to undermine U.S. sanctions programs and foreign policy objectives. 

Being named on the FSE List can severely limit access to the U.S. financial system and harm a party’s global business relationships, as many international institutions align their compliance frameworks with OFAC regulations. 

This makes the FSE List a powerful tool in promoting accountability and deterring sanctions evasion on a global scale.

When Was It Enforced?

Executive Order 13608, which was signed by the U.S. President on May 1, 2012, laid the foundation of the Treasury’s authority to designate foreign individuals and entities meeting the criteria set under this order.

However, the list was released for the first time in 2014 when several designations were added to the FSE list for violations of U.S. sanctions against Iran and Syria.

The list initially focused on individuals and organizations that helped entities and people in countries like Iran and Syria avoid the U.S. sanctions. 

As time went on, the list grew to include other entities and individuals involved in affairs pertaining to several different sanctionable countries.

Subsequent Changes in FSE List

Over the years, the FSE List has been updated to remove or include new individuals and companies that have been found guilty of violating sanctions evasion regulations. 

The OFAC regularly publishes these changes to keep the sanctions enforcement system up to date.

Under the EO-13608, the Treasury has targeted individuals and entities from various countries, including China, Germany, India, Malaysia, Russia, South Korea, Switzerland, and Turkey.​

The regular updates to FSE allow the U.S. authorities to hold those accountable who try to bypass the sanctions measures.

How Does the FSE List Work?

The FSE List is aimed at individuals and entities that have attempted or evaded U.S. sanctions.

If a company or an individual gets designated on the FSE list, it means their access to the U.S. commercial market and financial system will be blocked, as FSE designation will restrict U.S. persons from dealing with the listed entities or individuals.

Moreover, once a name appears on the list, it alerts other banks, institutions, or companies outside the U.S. who want to maintain their access to the U.S. financial and commercial markets without fearing the risks of secondary sanctions. 

As a result, designated persons are practically cut off from the global market.

Foreign Sanctions Evaders List vs Specially Designated Nationals List (SDN List)

The OFAC of the U.S. Department of the Treasury publishes its list under two different categories: the SDN List for full-blocking sanctions, and Non-SDN lists that refer to sanctions with specific restrictions or exceptions. The FSE list is part of the Non-SDN sanctions category.

The SDN List comprises individuals, companies, and entities that have been directly targeted by the US sanctions for supporting terrorist groups, drug trafficking, or violating human rights. U.S. persons are prohibited from dealing with SDN-designated entities, including blocking any of their assets within the U.S. jurisdiction.

But the FSE List is aimed at people or companies who assisted, conspired, or evaded the U.S. sanctions against Syria and Iran. U.S. persons are prohibited from dealing with the entities and individuals on the FSE list. 

Although assets of listed entities in the US jurisdiction are not blocked, U.S. companies or individuals will need prior authorization from OFAC before executing any transfers or transactions.

Penalties for Violating the FSE List

U.S. entities and individuals can face severe civil and criminal penalties if found to violate restrictions imposed by the FSE list.

For example, a person found to be exporting services to someone on the FSE list can face a civil penalty of up to $250,000, or if convicted criminally, a fine of up to $1,000,000 or up to 20 years imprisonment, if the violation is committed by an individual.

Conclusion

The FSE List serves as a strategic tool for U.S. authorities to hold foreign individuals and entities accountable for sanctions evasion, especially regarding Iran and Syria. To mitigate regulatory risks, businesses engaged in international trade must integrate FSE List monitoring into their compliance programs.