SDN list

The SDN List is the US Treasury Department's list of people, companies, vessels and other entities subject to blocking sanctions. US persons generally must freeze their property interests and cannot transact with them unless authorized.

SDN stands for Specially Designated Nationals and Blocked Persons. The list is maintained by the US Treasury Department's Office of Foreign Assets Control, or OFAC, which administers and enforces US economic sanctions.

For identity verification and compliance teams, SDN screening means checking customers, beneficial owners, counterparties and sometimes related parties against OFAC sanctions data before and during a business relationship.

What an SDN designation means

• Assets and property interests within US jurisdiction must generally be blocked, meaning frozen rather than seized.
• US persons, including US businesses and their overseas operations, are generally prohibited from dealing with an SDN unless OFAC has issued an authorization.
• A company that is owned, directly or indirectly, 50% or more in aggregate by one or more SDNs can also be blocked under OFAC's 50 Percent Rule, even if it is not named on the list.
• The list can include individuals, businesses, banks, vessels, aircraft and other entities connected to sanctioned conduct or jurisdictions.

How it differs from ordinary watchlists

An SDN match is not the same as a match to a politically exposed person list, adverse-media database or general law-enforcement watchlist. It can create a legal sanctions obligation, but a potential match must be investigated carefully because names, dates of birth and other identifiers can be similar.

Screening in practice

Organizations commonly screen at onboarding, before payments or other transactions, and periodically afterward because OFAC updates sanctions designations. A true match may require blocking property, rejecting a prohibited transaction and reporting to OFAC, depending on the facts and the organization's legal obligations.

Go deeper: Sanctions Screening: How Firms Check Customers Against Sanctions Lists.