Sanctions

Financial and trade penalties that cut targeted countries, firms, or people out of the U.S. system.

Also known as: OFAC Sanctions, Economic Sanctions

What it is

Sanctions are restrictions imposed by the U.S. Treasury's OFAC and other agencies that freeze assets and ban dealings with designated targets. They can hit countries, companies, banks, or individuals. Violations carry severe penalties.

What it does

Sanctions can strand assets, sever supply lines, and force firms to exit markets, hitting exposed multinationals while sometimes lifting substitutes. Investors assess which listed companies have counterparty or revenue exposure. Energy, banking, and shipping are frequent transmission channels.

The evidence

Sanctions on major oil and banking economies have forced Western firms to write down assets and exit operations.

Best for

Globally exposed energy, financials, and shipping names; domestic substitutes vary by regime.

Pairs well with

export-controls, entity-list, spr

Use cautiously with

Secondary sanctions and licenses complicate exposure; assuming a clean cutoff ignores carve-outs and wind-down periods.

Cautions

Enforcement and scope evolve, so exposure that looks contained can widen unexpectedly.