The Office of Foreign Assets Control (OFAC) administers and enforces U.S. economic sanctions programs — one of the most powerful tools in the U.S. government's foreign policy arsenal. For Turkish companies engaged in commodity trading, energy transactions, financial services, and cross-border commerce, OFAC sanctions represent a significant and growing compliance risk.

Sanctions enforcement has intensified dramatically since 2022, driven by the Russia-Ukraine conflict, expanded Iran and Venezuela programs, and new designations targeting entities in multiple jurisdictions. Turkish companies — operating at the intersection of European, Middle Eastern, and Central Asian trade flows — face particular exposure. This analysis examines the current sanctions landscape, key risk areas for Turkish businesses, and the elements of an effective compliance program.

OFAC administers more than thirty active sanctions programs targeting specific countries, regimes, terrorist organizations, narcotics traffickers, and other designated parties. The primary legal authorities include the International Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), and numerous country-specific statutes.

U.S. sanctions apply to:

• U.S. persons (citizens, permanent residents, and U.S.-incorporated entities) wherever located
• Any transaction that occurs within the United States or involves U.S. financial institutions
• Non-U.S. persons in certain circumstances under secondary sanctions programs

The last category — secondary sanctions — is particularly significant for Turkish companies. Secondary sanctions can penalize non-U.S. entities for conducting business with sanctioned parties, even when no U.S. person or U.S. financial institution is involved in the transaction.

Following Russia's invasion of Ukraine, the United States, European Union, and United Kingdom imposed the most comprehensive sanctions regime against a major economy in history. For Turkish companies, the Russia sanctions create several specific risk categories:

Re-export and Transshipment Risk: OFAC and the Bureau of Industry and Security (BIS) have identified Turkey as a jurisdiction of concern for the re-export of controlled goods to Russia. Turkish companies that export U.S.-origin goods, technology, or software to Russia — or that facilitate such exports — face potential OFAC and BIS enforcement action.

Financial Transaction Risk: Turkish banks and financial institutions that process payments involving sanctioned Russian entities or that facilitate transactions designed to evade sanctions face potential secondary sanctions designation. Turkish companies should ensure their banking relationships are with institutions that maintain robust sanctions compliance programs.

Energy Sector Exposure: Turkish energy companies that purchase Russian oil, gas, or petroleum products must navigate the G7 oil price cap mechanism and related OFAC guidance. Transactions above the price cap threshold can trigger sanctions exposure for non-U.S. entities.

The Iran sanctions program remains one of OFAC's most comprehensive and actively enforced regimes. Turkish companies with any connection to Iranian counterparties — including through intermediaries, joint ventures, or supply chains — face significant exposure.

Secondary sanctions under the Iran Freedom and Counter-Proliferation Act (IFCA) and the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) can target non-U.S. entities that engage in significant transactions with the Iranian energy, shipping, or financial sectors.

The Specially Designated Nationals and Blocked Persons (SDN) List is OFAC's primary designation tool. Transactions with SDN-listed parties are generally prohibited for all U.S. persons and, under secondary sanctions programs, can expose non-U.S. entities to designation risk.

Turkish companies should screen all counterparties — including beneficial owners, intermediaries, and financial institutions — against the SDN List before entering into transactions. OFAC updates the SDN List frequently; one-time screening at contract execution is insufficient.

OFAC enforcement actions in 2025-2026 reflect several notable trends:

Record Civil Penalties: OFAC imposed over $1.5 billion in civil penalties in 2025, the highest annual total in the program's history. Penalties have been imposed on financial institutions, commodity traders, technology companies, and logistics providers.

Focus on Evasion Schemes: OFAC has prioritized enforcement against entities that facilitate sanctions evasion — including front companies, shell entities, and intermediaries that obscure the ultimate sanctioned party. Turkish companies that unknowingly participate in evasion schemes face the same enforcement risk as knowing participants.

Voluntary Self-Disclosure: OFAC's enforcement guidelines provide significant penalty mitigation for voluntary self-disclosure of potential violations. Companies that discover potential violations should consult legal counsel immediately to evaluate the self-disclosure option.

An effective OFAC compliance program for a Turkish company engaged in cross-border commerce should include:

Management Commitment: Senior leadership must demonstrate visible commitment to sanctions compliance. OFAC has cited lack of management commitment as an aggravating factor in enforcement actions.

Risk Assessment: A written risk assessment identifying the company's specific sanctions exposure based on its business activities, geographic footprint, customer base, and supply chain.

Internal Controls: Policies and procedures for SDN screening, transaction monitoring, and escalation of potential violations. Controls should be proportionate to the company's risk profile.

Testing and Auditing: Regular testing of compliance controls and independent auditing of the compliance program.

Training: Annual training for all employees involved in transactions, sales, finance, and compliance functions.

Recordkeeping: Maintenance of transaction records sufficient to demonstrate compliance in the event of an OFAC inquiry.

Cross-border commercial contracts involving Turkish companies should include:

• Representations and warranties that neither party is an SDN or owned/controlled by an SDN
• Covenants requiring ongoing SDN screening throughout the contract term
• Termination rights triggered by sanctions designation of either party
• Indemnification provisions addressing sanctions-related losses
• Governing law and dispute resolution provisions that account for sanctions-related performance impediments

The consequences of OFAC violations are severe: civil penalties up to the greater of $1,000,000 or twice the value of the transaction per violation; criminal penalties including imprisonment for willful violations; and reputational damage that can affect banking relationships, insurance coverage, and business partnerships. For Turkish companies with U.S. business interests, an OFAC violation can effectively terminate access to the U.S. financial system.

1. Conduct a sanctions risk assessment specific to your company's business activities and geographic exposure
2. Implement automated SDN screening for all counterparties, including beneficial owners and intermediaries
3. Review existing contracts for sanctions-related representations, warranties, and termination rights
4. Assess Russia-related exposure including re-export risk, financial transaction risk, and energy sector exposure
5. Establish a voluntary self-disclosure protocol so that potential violations are escalated to legal counsel promptly
6. Train relevant personnel on sanctions compliance obligations and red flags

• OFAC sanctions enforcement has reached record levels and shows no signs of abating
• Turkish companies face particular exposure due to their position at the intersection of multiple high-risk trade flows
• Secondary sanctions can apply to non-U.S. entities — the absence of a U.S. nexus does not eliminate sanctions risk
• Russia-related sanctions create specific re-export, financial transaction, and energy sector risks for Turkish businesses
• An effective compliance program is the best defense against enforcement action and the best evidence of good faith in the event of a violation
• Voluntary self-disclosure can significantly reduce penalties for companies that discover and report potential violations