OFAC SDN list and Venezuela: compliance for funds, banks, and counterparties

The OFAC SDN list is the operational core of US sanctions enforcement. For institutional investors, banks, funds, and counterparties dealing with anything Venezuela-related, SDN screening is not optional. The penalty structure for violations — civil penalties up to approximately $370,000 per violation (inflation-adjusted) plus criminal penalties up to $1 million and 20 years imprisonment for willful violations under IEEPA — makes this one of the highest-stakes compliance areas. This guide covers what the list is, the 50 percent rule that extends its reach, the major Venezuelan SDNs, and the screening protocols that institutional counterparties need to maintain.

Companion to our OFAC framework, PDVSA bonds guide, and distressed funds guide.

What the SDN list is

The Specially Designated Nationals and Blocked Persons List (SDN List) is maintained by the US Treasury Department's Office of Foreign Assets Control (OFAC). It lists individuals, companies, vessels, and aircraft designated under various sanctions authorities. The SDN list:

• Prohibits US persons from transacting with listed parties
• Blocks property of listed parties that is in the US or in possession/control of US persons
• Is published at sanctionssearch.ofac.treas.gov
• Is updated as designations and removals occur
• Is the operational reference for US sanctions compliance globally

Venezuelan SDN categories

Government entities

• PDVSA (Petróleos de Venezuela S.A.) — designated January 28, 2019. Remains designated.
• Banco Central de Venezuela (BCV) — subject to broader blocking under EO 13884 and related orders
• Various PDVSA subsidiaries and joint ventures — captured by the parent designation and the 50% rule
• Other state-owned enterprises — selectively designated

Individual officials

Hundreds of Venezuelan individuals have been designated since 2017 across multiple Executive Orders. Categories include:

• Senior government officials (executive branch, ministries)
• Military officers and security service personnel
• Judicial officials including Supreme Court justices
• Election authorities
• Connected business figures and family members
• Cuban officials supporting Venezuelan operations

Vessels and aircraft

Various vessels — particularly tankers involved in transporting Venezuelan oil — have been designated. The December 19, 2025 SDN additions (Treasury SB-0348) included additional shadow-fleet operators.

Connected entities

Front companies, shell entities, and other parties used by designated individuals to evade sanctions have been designated.

The 50 percent rule in detail

OFAC's August 13, 2014 guidance on entities owned by blocked persons established the foundational interpretive rule: any entity that is 50 percent or more owned, in the aggregate, directly or indirectly, by one or more blocked persons is itself blocked, regardless of whether it appears on the SDN list.

Key elements:

• Aggregate ownership — multiple SDNs together can trigger the rule (e.g., two SDNs each owning 30%)
• Direct or indirect — ownership through intermediate entities counts
• 50% threshold — at exactly 50%, the entity is blocked
• Property blocked — property of the 50%-rule-blocked entity is itself blocked
• Transactional prohibition — US persons prohibited from transacting with the 50%-rule-blocked entity

For PDVSA-related entities, the 50% rule generally captures the empresas mixtas (60% PDVSA / 40% foreign partner structure). For political-figure-controlled entities, the analysis can be complex with multiple SDNs and minority partners.

Screening protocols

At onboarding

• Search the counterparty's full legal name and ID identifiers in the OFAC SDN tool
• For institutional counterparties, conduct 50 percent rule analysis including ultimate beneficial ownership
• Cross-check against commercial screening databases (Refinitiv World-Check, Dow Jones Risk and Compliance, LexisNexis Risk Solutions)
• Document the screening results in your file
• For elevated-risk counterparties, engage outside sanctions counsel

Ongoing screening

• Re-screen counterparties periodically — quarterly or annually depending on risk
• Re-screen upon any SDN list update relevant to your portfolio
• Re-screen upon counterparty ownership change or material development
• Subscribe to OFAC notification services for real-time list-change alerts

Transaction screening

• For each material transaction, re-confirm counterparty SDN status
• For wires, automated screening systems flag transactions touching SDN parties
• Hold flagged transactions pending investigation
• Document approval or rejection

Recordkeeping

• Retain screening evidence for at least 5 years (the OFAC recordkeeping requirement)
• Retain transactional records that show the basis for transaction approval
• Be prepared to demonstrate the screening process to OFAC examiners or regulators

Recent enforcement actions

OFAC actively enforces Venezuela-related sanctions. Notable recent action categories:

• Settlements with financial institutions for processing transactions touching Venezuelan SDNs
• Settlements with crypto exchanges for facilitating transactions involving sanctioned Venezuelan parties
• Designations of shadow-fleet operators moving Venezuelan oil outside the authorized framework
• Designations of front companies used by designated individuals
• Criminal prosecutions in coordination with DOJ for willful violations

Penalty structures range from administrative warnings to multi-million-dollar settlements and criminal indictments. The trend in 2024-2026 has been toward more rigorous enforcement.

Sector-specific compliance considerations

For asset managers and funds

• Pre-investment SDN screening of any direct holding
• 50% rule analysis for issuer-side designations
• Custodian-level screening as a secondary check
• Investor screening at subscription
• Ongoing portfolio screening
• Sanctions risk disclosure in fund documents

For banks

• Automated transaction screening for all wires
• Customer onboarding KYC including sanctions screening
• Correspondent-bank due diligence (correspondent's own SDN screening adequacy)
• Trade finance review including underlying parties
• OFAC voluntary self-disclosure protocols if a violation is identified

For crypto exchanges

• User KYC with SDN screening
• Wallet address screening (Chainalysis, Elliptic, other blockchain analytics)
• Transaction monitoring for patterns associated with sanctioned-party activity
• Periodic re-screening of users and wallets
• Voluntary self-disclosure if violations identified

For individuals and family offices

• SDN screening of counterparties before any meaningful transaction
• For Venezuelan-diaspora users sending remittances, screen recipient names
• For real estate purchases, screen seller and any institutional party
• For bond purchases, verify GL 3I eligibility and screen counterparty broker-dealer
• Document the screening for tax and compliance file

The personal-remittance angle

For US-person Venezuelan-Americans sending family remittances to Venezuela: personal remittances to non-sanctioned individuals are permitted. The recipient screening obligation continues to apply — the family member receiving must not be on the SDN list and must not be 50%+ owned by SDN. For typical family situations this is not an issue, but the screening should be documented even for routine personal use. See our USDT remittances guide.

Resources

• OFAC SDN Search: sanctionssearch.ofac.treas.gov — primary public-facing tool
• OFAC Consolidated List: downloadable for institutional use
• OFAC Frequently Asked Questions: ofac.treasury.gov/faqs
• OFAC Recent Actions: updates on designations and removals
• Commercial sanctions screening databases: Refinitiv, Dow Jones, LexisNexis, Bridger, others
• OFAC reporting and licensing: ofac.treasury.gov/reporting