OFAC is the U.S. Treasurys Office of Foreign Assets Control; it administers and enforces U.S. economic and trade sanctions. Its designation and blocking authorities flow from statutes and presidential authorities (most notably the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. �a7 1701 et seq.), related implementing regulations, and executive orders that declare national emergencies or impose sanctions; when OFAC lists a person or designates property as "blocked," U.S. persons generally must freeze and may not deal with that property without OFAC authorization.
Executive Order 13902 (issued Jan. 10, 2020) directs sanctions targeting additional sectors of Irans economy (including petroleum and petrochemical activities); it authorizes blocking and other prohibitions on transactions involving persons operating in specified Iranian sectors and was the legal basis for later OFAC sectoral and entity designations under the Iran sanctions program.
The SDN List is OFACs List of Specially Designated Nationals and Blocked Persons. Being on the SDN List (or having property labeled "blocked") means U.S. persons must freeze any assets or interests in assets under their possession or control and are generally prohibited from dealing with the designated person or property unless OFAC issues a license; non-U.S. persons can also face penalties for facilitating sanctions evasion.
A "shadow fleet" is a network of vessels (often older tankers) and front companies used to move sanctioned oil while hiding origin and ownership; operators use techniques like ship-to-ship transfers, turning off or falsifying automatic identification systems (AIS), renaming/reflagging, false voyage documents, and opaque ownership to evade sanctions and tracking.
A ship-to-ship (STS) transfer is when one vessel transfers cargo directly to another at sea (instead of loading/unloading at port). Treasury singles it out because STS makes it easier to obscure oils origin, alter ship records, and bypass port controls and sanctions screening, enabling revenue flows to sanctioned actors to continue.
Designations can deter or penalize third parties: foreign buyers may face de-risking or loss of access to U.S. finance; insurers and reinsurers can refuse cover (raising costs or blocking shipments); ports may deny entry to flagged/blacklisted vessels; and banks that process related payments risk secondary sanctions, correspondent-account restrictions, or penalties for facilitating transactions tied to blocked property or evasion.
NSPM-2 refers to a National Security Presidential Memorandum (NSPM-2) issued by the U.S. government directing interagency policy on countering illicit financing (used by the administration to prioritize and coordinate sanctions and related measures against Iran ); Treasury says its designations continue the NSPM-2 policy by targeting oil revenue channels that fund Irans proxies and security apparatus.