The U.S. Treasury Department’s Office of Foreign Assets Control on Tuesday issued new guidance warning that sham transactions used by sanctioned individuals and entities to disguise continuing control over assets do not extinguish a blocked interest in property under U.S. sanctions rules. 

In the advisory, OFAC said blocked persons often use proxies, intermediaries, trusts, straw owners, and front companies to transfer assets on paper while retaining the practical or economic benefits of ownership. Such arrangements can involve investment vehicles, bank accounts, real estate, private jets, yachts, and companies, the agency said. 

OFAC said the advisory is intended to highlight sanctions-evasion risks and to help companies and financial institutions assess whether a purported transfer is genuine. Among the red flags it identified were commercially unreasonable transactions, transfers to family members or close associates, unclear business purpose, unnecessarily complex structures involving higher-risk jurisdictions, continued involvement by the blocked person, transfers made close to the time of designation, and evasive responses about the sanctioned party’s role. 

The agency cited prior enforcement and blocking actions to illustrate the issue, including a June 2022 notification of blocked property to Heritage Trust, a Delaware-based trust, in which sanctioned Russian oligarch Suleiman Kerimov was found to retain a property interest through layers of shell companies and proxies. 

OFAC also cited a case involving Russian businessman Vladimir Potanin, saying it determined he retained an interest in four Liechtenstein foundations tied to his children and prevented funds from moving through U.S. financial institutions before those entities were designated in 2024. 

Trusts and similar legal arrangements require heightened scrutiny because, while often used legitimately, they can be exploited to obscure a blocked person’s continuing control. The advisory pointed to a December 2025 settlement with a fiduciary who, according to OFAC, should reasonably have known that a sanctioned person was using a proxy to retain control over a family trust. 

Read the OFAC guidance here