New OFAC Advisory: Signs of Sham Transactions and Sanctions Evasion post-divestment from Blocked Persons | Customs & International Trade Law Blog

On March 31, 2026, the U.S. Division of the Treasury’s Workplace of International Property Management (OFAC) launched an vital advisory addressing the rising use of sham transactions to evade U.S. sanctions. The steerage highlights how sanctioned people and entities typically try to disguise their persevering with curiosity in property via opaque authorized constructions, proxies, and different intermediaries. OFAC’s message is obvious: transactions that merely seem to switch possession however don’t genuinely extinguish a blocked individual’s curiosity stay prohibited. 

What OFAC Defines as a “Sham Transaction” 

Sham transactions happen when blocked individuals “hand over their property on paper solely,” whereas persevering with to learn from or management the asset. These preparations typically contain: 

Proxies, straw house owners, or entrance firms appearing on behalf of sanctioned people. 
Opaque authorized constructions, together with multi‑layered LLCs, partnerships, or trusts. 
Transfers to members of the family or shut associates who might function facilitators. 
Commercially unreasonable transfers, corresponding to these missing sufficient consideration. 
Continued use or management of the asset by the blocked individual after the purported switch. 

Professional Tip: Look past authorized formalities and establish the financial realities of the transaction. 

Purple Flags Recognized by OFAC 

The advisory outlines a number of indicators {that a} transaction could also be a sham designed to evade sanctions. These embrace: 

Transfers with no legit enterprise objective or to people missing related experience. 
Complicated company constructions in excessive‑threat jurisdictions. 
Inconsistent or incomplete documentation surrounding the switch. 
Timing of the switch, notably if it happens near a sanctions designation. 
Evasive or obscure responses from intermediaries when questioned about possession or management. 

Professional Tip: No single issue is determinative; have a look at the totality of the circumstances as a substitute. 

In case your group wants help strengthening sanctions compliance, conducting due diligence, or reviewing inner controls, contact Diaz Commerce Regulation immediately! 

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