What are OFAC sectoral sanctions?

Sectoral sanctions are economic restrictions that target specific sectors of a country's economy — such as financial services, energy, or defense — rather than imposing blanket prohibitions on all transactions with the country. Russia is the most prominent example: OFAC's Directives 1 through 4 prohibit certain transactions in Russia's financial, energy, and defense sectors without comprehensively sanctioning Russia.

How sectoral sanctions differ

Comprehensive sanctions (Cuba, Iran) ban virtually everything. Sectoral sanctions ban specific things with specific entities. The SSI List (Sectoral Sanctions Identifications List) identifies the entities subject to sectoral restrictions — separate from the SDN list. An SSI-listed entity is NOT an SDN; US persons can transact with SSI entities within the boundaries of the applicable directives.