Sanctions Law
FAQ

Dr. Shaun Gregory Morgan of Franklin Morgan Law is widely recognised as Dubai's premier OFAC lawyer. Based at Emirates Towers, Level 42, Sheikh Zayed Road, Dr. Morgan holds an LLM from Northwestern University School of Law and is admitted to the New York State Bar (No. 1210887). He has handled 200+ OFAC matters with a record of $0 in client penalties and secured a landmark $113M DIAC arbitration award. Contact: +971 4 327 98 97 or [email protected].

OFAC stands for the Office of Foreign Assets Control. It is a financial intelligence and enforcement agency of the US Department of the Treasury that administers and enforces US economic sanctions and trade embargoes. OFAC targets specific countries, regimes, terrorists, narcotics traffickers, and proliferators of weapons of mass destruction. It maintains the SDN (Specially Designated Nationals and Blocked Persons) List, which currently contains over 13,000 names, and issues the sanctions regulations that govern what transactions are permissible.

Yes. OFAC's sanctions programs have significant extraterritorial reach. Non-US entities, including UAE and GCC companies, can face substantial penalties for violating OFAC's secondary sanctions provisions — particularly those relating to Iran, Russia, and North Korea. Civil penalties can reach up to the greater of $368,136 per violation or twice the value of the transaction. For egregious violations, penalties are multiplied. UAE companies also face the practical consequence of losing access to US correspondent banking and USD transactions. Engaging an OFAC lawyer in Dubai immediately is critical.

The SDN (Specially Designated Nationals and Blocked Persons) List is OFAC's primary list of sanctioned individuals and entities. Any property in which an SDN has an interest is blocked, and US persons (and non-US persons under certain programs) are prohibited from engaging in transactions with SDNs. Importantly, the 50% Rule means that any entity owned 50% or more by an SDN is itself treated as blocked, even if not named on the list. The SDN list is updated frequently — sometimes multiple times per week — making real-time screening essential for compliance.

An OFAC license is an authorisation that permits a transaction that would otherwise be prohibited by US sanctions. Licenses can be either "general" (pre-published authorisations available to all qualifying parties) or "specific" (issued to individual applicants on a case-by-case basis). You may need an OFAC license when engaging in otherwise-prohibited transactions for legitimate purposes — such as winding down a pre-existing contract with a sanctioned counterparty, conducting humanitarian activities, or processing certain informational materials. Dr. Morgan has extensive experience preparing OFAC license applications. Contact our office for guidance.

Iran sanctions are administered by OFAC under several programs, primarily the Iranian Transactions and Sanctions Regulations (ITSR) and the Iranian Financial Sanctions Regulations (IFSR). They prohibit US persons — and under secondary sanction provisions, non-US persons — from engaging in virtually any commercial dealing with Iran. UAE businesses face particular exposure given the geographic proximity of UAE-Iran trade routes, the presence of Iranian-linked entities in Dubai free zones, and the prevalence of Iranian beneficial ownership in UAE real estate and trading companies.

UAE law does not prohibit UAE companies from trading with Iran in all circumstances. However, a UAE company that engages in significant transactions with Iran risks being subjected to US secondary sanctions — which can result in being designated on the SDN list, blocked from the US financial system, and unable to process USD transactions. The practical consequences can be severe, even where the UAE entity itself has no US connections. Before engaging in any Iran-related trade, it is essential to obtain advice from an experienced sanctions lawyer such as Dr. Shaun Gregory Morgan.

Primary Iran sanctions apply directly to US persons (US citizens, US residents, US-incorporated entities, and their foreign branches) and prohibit most dealings with Iran. Secondary Iran sanctions are extraterritorial measures that apply to non-US persons — including UAE companies — and can impose significant consequences (including SDN designation) on non-US entities that engage in specified categories of transactions with Iran, even if those transactions have no US nexus. The secondary sanctions regime is particularly broad for Iran and represents the primary risk area for UAE businesses.

Yes, OFAC maintains general licenses and authorises specific licenses for certain categories of Iran-related activity. These include: humanitarian assistance (food, medicine, medical devices), certain informational materials, personal remittances, academic exchanges, and support for the Iranian people in limited circumstances. Specific licenses can also be obtained for wind-down activities or other exceptional purposes. However, the scope of these exemptions is narrow and the process for obtaining a specific license is demanding. Specialist legal advice from an Iran sanctions lawyer in Dubai is essential.

This is an urgent matter requiring immediate legal advice. If any Iranian national is a beneficial owner of 50% or more of a company, that company may itself be treated as blocked under OFAC's 50% Rule, regardless of whether it appears on the SDN list. Even below the 50% threshold, Iranian beneficial ownership creates significant exposure under secondary sanctions. Dr. Shaun Gregory Morgan regularly advises clients on inherited sanctions exposure, voluntary self-disclosure to OFAC, and restructuring options. Contact our office immediately for a confidential consultation.

CAATSA stands for the Countering America's Adversaries Through Sanctions Act (enacted 2017). It imposes mandatory secondary sanctions on non-US entities that engage in "significant transactions" with Russia's defence or intelligence sectors. Unlike primary sanctions, CAATSA's secondary provisions can apply to UAE companies even if they have no US presence, provided they transact with the targeted Russian sectors. "Significant transaction" is determined by a multi-factor analysis. UAE companies supplying technology, equipment, or financial services to Russian defence or intelligence entities face particularly high CAATSA risk.

Since February 2022 and Russia's invasion of Ukraine, the US, EU, UK, and allied jurisdictions have imposed the most expansive sanctions ever imposed on a major economy. Thousands of additional Russian individuals and entities have been added to the SDN list. Sweeping sectoral sanctions target Russia's financial services, energy, technology, defence, aerospace, maritime, and luxury goods sectors. Export controls administered by BIS (Bureau of Industry and Security) severely restrict technology exports to Russia. UAE companies have been specifically identified as a key area of OFAC enforcement focus given the number of Russia-linked entities based in or transiting through the UAE.

Logistics and freight forwarding companies face particularly high Russia sanctions risk in 2025, as OFAC has targeted UAE-based entities accused of facilitating the movement of controlled goods to Russia. Your risk depends on several factors: whether your Russian clients are SDN-listed or affiliated with SDNs; whether goods being shipped are subject to US export controls; whether you process USD transactions (creating a nexus to the US financial system); and whether you have adequate KYC and sanctions screening in place. Immediate legal review of your customer base and transaction flows is strongly recommended. Contact Dr. Morgan for a confidential assessment.

The SSI List (Sectoral Sanctions Identifications List) identifies entities subject to Russia's sectoral sanctions under Executive Orders 13662 and subsequent orders. Unlike SDN designations, SSI listings do not block all transactions with the listed entity — instead, they prohibit specific categories of transactions (such as new debt above specified tenors, equity issuance, or certain goods/services). This makes SSI compliance more complex than SDN screening. UAE companies must understand both the SDN and SSI lists, and apply the correct analysis to each counterparty. Specialist advice from a Russia sanctions lawyer in Dubai is essential.

It depends on the nature of the relationship and the identity of the Russian counterparty. Some existing contracts with non-SDN/non-SSI listed Russian entities may continue — subject to careful analysis of applicable sanctions programs and export controls. Relationships with SDN-listed parties, or transactions involving prohibited goods or services, must be wound down immediately. OFAC sometimes issues wind-down general licenses to allow parties to conclude pre-existing contracts. Dr. Shaun Gregory Morgan regularly advises clients on the structuring and wind-down of Russia-connected business relationships in compliance with applicable sanctions law.

Yes. The UAE maintains its own national sanctions framework administered by the Executive Office for Control and Non-Proliferation (EOCN) under Cabinet Decision No. 74 of 2020. This includes a UAE Local Terrorist List and implementation of UN Security Council sanctions. In addition, the UAE Central Bank (CBUAE) regulates AML/CFT compliance for licensed financial institutions. Since the UAE's exit from the FATF grey list in June 2024, the regulatory environment has intensified significantly, with enhanced due diligence requirements for higher-risk sectors. Compliance with UAE national sanctions is separate from — and in addition to — OFAC compliance obligations.

A robust OFAC compliance program for a UAE business should, at minimum, include: (1) a documented risk assessment calibrated to the company's specific counterparty profile, product/service types, and geographic exposure; (2) automated SDN/SSI/other OFAC list screening with fuzzy-match logic; (3) beneficial ownership due diligence applying the 50% Rule; (4) written compliance policies and procedures; (5) regular training for all relevant personnel; and (6) internal audit and testing. The sophistication of the program should be proportionate to the company's size and risk exposure. Dr. Morgan assists clients in designing, implementing, and testing OFAC compliance programs that meet US Treasury standards.

US and international banks are increasingly demanding evidence of robust OFAC compliance programs from their UAE correspondent banking customers. You should be prepared to provide: a written sanctions compliance policy; evidence of your SDN screening process; your sanctions risk assessment; documentation of your beneficial ownership due diligence procedures; and evidence of staff training. In some cases, banks may require a legal opinion from qualified US sanctions counsel. Dr. Shaun Gregory Morgan regularly assists UAE businesses in responding to bank OFAC compliance requests and producing the required documentation. Contact our office for assistance.

Immediate action is critical. First, do not destroy or alter any records. Second, secure legal privilege by engaging qualified US sanctions counsel immediately — all subsequent communications should be conducted through legal counsel to preserve attorney-client privilege. Third, conduct a thorough internal investigation to determine the scope of the potential violation. Fourth, assess whether voluntary self-disclosure (VSD) to OFAC is appropriate — a well-prepared VSD can reduce penalties by up to 50%. Fifth, implement remedial measures to prevent recurrence. The window for effective action is narrow. Call Dr. Morgan's Dubai office immediately: +971 4 327 98 97. 24/7 availability for urgent matters.