Sanctions sit under more oil and fuel transactions than most people realize: every dollar payment, every vessel nomination, every counterparty with foreign ownership passes through their shadow. The Office of Foreign Assets Control, OFAC, is the US Treasury unit that runs the system: it writes the programs, keeps the lists, issues the licenses, and brings the enforcement cases. This page is the working literacy every trader, buyer, and hauler in this industry should carry, written plainly. It is education, not legal advice; sanctions law is exactly the field where your counsel earns their fee, and rules change fast enough that this page carries a date: it describes the system as of July 26, 2026. Two companion pages go deep on the programs this trade asks about most: Venezuela and Cuba.
The machinery: programs, lists, and blocking
OFAC administers dozens of sanctions programs, and they come in two shapes. List-based programs target named persons, companies, and vessels wherever they are; comprehensive programs target essentially all dealings with a country, Cuba being this trade's nearest example. The central instrument is the Specially Designated Nationals list, the SDN list: persons and entities whose property and interests in property are blocked. Blocked means frozen and untouchable: a US person who finds itself holding a blocked party's funds or cargo must freeze them and report, and may not trade with, pay, or receive from that party at all. The list holds thousands of entries, changes constantly, sometimes several times a week, and includes not just people and companies but ships and aircraft by name, which is why vessel vetting screens the steel as carefully as the counterparty.
The rule that catches the unwary is the 50 Percent Rule: any entity owned 50 percent or more, in aggregate, by one or more blocked persons is itself blocked, automatically, with no listing required. A trading company that appears on no list, but whose shareholders include two SDNs at 30 and 25 percent, is blocked at 55 percent combined, and dealing with it carries the same consequences as dealing with the SDNs themselves. This single rule is why real screening means ownership charts, not just name checks, why sellers get asked to declare their owners, and why the diligence habit that runs through our crude and chartering pages treats "who actually owns this counterparty" as a first-order question.
Who must comply, and how far the reach goes
The rules bind US persons: US citizens and permanent residents wherever they are in the world, entities organized under US law including their overseas branches, and anyone physically in the United States. For a US company there is no offshore workaround, and the prohibition on facilitation closes the side door: a US person may not approve, finance, or assist a foreign party's transaction that the US person could not do directly. The reach extends further in practice than on paper, because the world's oil trades in dollars, and a dollar payment clearing through a US bank gives the system a US touchpoint; non-US companies have paid nine-figure settlements for causing US banks to process sanctioned business. Layered on top are secondary sanctions in certain programs: measures aimed at non-US persons who deal with targeted parties even without any US nexus, which is why banks and majors everywhere behave as if OFAC were their own regulator.
Licenses: the only two doors
Prohibitions come with carve-outs, and the carve-outs take exactly two forms. A general license is a published, standing authorization: numbered, posted on OFAC's website, available to anyone whose transaction fits its terms exactly, and amended over time by lettered versions where the newest letter supersedes the rest, a license 46 becomes 46A, then 46C, and only the current text counts. A specific license is granted by OFAC to a named applicant, after an application, for described transactions. That is the entire universe of authorization, and it supports the single most useful fraud test in this industry: there is no third instrument. No transferable approval letter, no allocation blessing a broker can carry from deal to deal, no stamped PDF that makes a cargo legal for whoever holds it. Real authorization is either a public text you can read on ofac.treasury.gov today, or a license naming the party in front of you, verifiable by asking them to show it and confirming its terms with counsel. Our Venezuela page shows this test working against the richest ecosystem of fake sanctions paper on earth.
Penalties, strict liability, and what real compliance looks like
Two facts discipline the whole field. First, civil liability is strict: intent is not required, and a company that dealt with a blocked party by accident still violated the rules, with penalties assessed per violation that run from six figures to, in willful criminal cases, prison. Second, the system rewards honesty: voluntary self-disclosure and a genuine compliance program are formal mitigating factors, which is why mature companies treat a discovered problem as something to surface, not bury. Working compliance in this trade is not mysterious: screen every party, bank, and vessel against current lists before money or product moves and again before closing; chase ownership past the name to the 50 percent math; put sanctions representations and termination rights in contracts; route dollar payments with eyes open; keep records; and when a transaction brushes a sanctioned program, put counsel in the loop before commitment, not after. It is the same evidence-first culture as instrument verification and cargo diligence, applied to the one risk in the trade that can outweigh the cargo itself.
Common questions
Where do you check the lists?
OFAC publishes the SDN and related lists with a free search tool on the Treasury website, and commercial screening services layer fuzzy matching and monitoring on top. The lists change constantly, so screening is a repeated discipline tied to transaction events, not a one-time checkbox at onboarding.
Does a sanctions clause in the contract protect you?
It helps, representations, termination rights, and compliance covenants are standard armor, but paper cannot substitute for screening, because liability follows the transaction, not the promises around it. The clause is the seatbelt; the screening is the driving.
What should a smaller company do without a compliance department?
Scale the same skeleton down: a screening tool, an ownership question in onboarding, sanctions language in contracts, one person who owns the checklist, and a sanctions lawyer's number for the day something brushes a program. The cost is small against a single frozen payment, and counterparties increasingly require evidence of exactly this.
The program pages, and where Vexon fits
The two programs this trade asks about most get their own deep pages: Venezuela sanctions and the oil trade, where a lattice of general licenses defines a narrow lawful lane, and Cuba sanctions and the fuel trade, where a statutory embargo and a 180-day vessel rule shape the whole Caribbean market. Vexon screens counterparties, vessels, and cargo origins as standing practice across its international business, the same discipline our qualification process applies at home: get in touch with supply or cargo questions.