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So what is a blocked person? In plain terms, a blocked person is someone whose property and interests are frozen under US sanctions rules. The Office of Foreign Assets Control, or OFAC, runs these rules. Once a person or company is blocked, US persons generally cannot deal with them at all.
This matters for any business that touches US trade. If you deal with a blocked person by mistake, you face real penalties. Good denied party screening is how you catch these names before a deal goes wrong. This guide keeps things simple and practical.
What “blocked” actually means
When OFAC blocks a person, two things happen at once. Their property and interests in property get frozen. And US persons are barred from most dealings with them. This is the core of what people call blocking.
A “person” here is broad. It can be an individual, a company, a vessel, or a group. Blocking is not a fine or a court case. It is an immediate freeze that takes effect once the name is designated. You do not get a warning first.
Who counts as a US person
The rules bind “US persons”. This group is wider than many people think. If you fall in it, the blocking rules apply to you.
- US citizens and permanent residents, wherever they live.
- Anyone physically inside the United States.
- Companies organised under US law, and their foreign branches.
Some programs reach even further. They can cover foreign subsidiaries of US companies. If your firm has any US link, assume the rules can touch you.
Where blocked persons are listed
Most blocked persons appear on the Specially Designated Nationals list. People call it the SDN list. OFAC publishes and updates it. Each entry names the person and often lists aliases, addresses, and ID numbers.
You can learn more in our guide to the OFAC SDN list. To screen against many US lists at once, the Consolidated Screening List pulls several of them together. That saves time when you check a new customer.
The 50 percent rule
Here is a trap that catches many businesses. A company can be blocked even if it is not on any list. This happens because of the 50 percent rule.
Under this rule, a firm is blocked when blocked persons own 50 percent or more of it. The ownership can be direct or indirect. It can also be through several owners added together. The firm itself may never appear on the SDN list. It is still off limits.
This is why you must look past the name in front of you. Check who owns the customer. Our guide to the 50 percent rule for sanctions walks through the detail.
What you can and cannot do
Once a person is blocked, the default is simple. You stop. You do not send goods, money, or services their way. You also do not receive value from them without OFAC permission.
| Situation | What it usually means |
|---|---|
| A match on the SDN list | Freeze any related property. Do not proceed. Report as required. |
| Owner is 50 percent or more blocked | Treat the whole company as blocked. |
| A possible but unclear match | Pause and review before you act. |
If property is blocked, you often must hold it and report it to OFAC. You cannot simply return it to the person. Some narrow dealings need a licence from OFAC first.
How to spot a blocked person before a deal
Screen every party
Check customers, suppliers, banks, and freight partners. Screen at onboarding and again before each shipment. Names get added to lists all the time.
Check ownership
Ask who owns the company. Then apply the 50 percent rule to what you find. A clean name is not enough on its own.
Handle near matches with care
Not every hit is real. A false positive is a name that looks like a match but is not. Confirm details like date of birth or address before you clear or block anyone.
If you are new to this, start with our overview of denied party screening basics. It shows how these checks fit into daily trade.
Why it matters
Dealing with a blocked person is a serious breach. It does not depend on you meaning to do harm. Many sanctions rules apply even when you did not know.
That is why the penalties for dealing with a denied party can be steep. Fines can be large. Your reputation can suffer too. Screening is far cheaper than a violation.
Frequently Asked Questions
Is a blocked person the same as an SDN?
They overlap but are not identical. Most SDNs are blocked persons. But a company can be blocked under the 50 percent rule without being on the SDN list. So all blocked persons are not listed by name.
Can I ever deal with a blocked person?
Only with OFAC permission. Some transactions are allowed under a general or specific licence. Without one, the answer is no. Check before you act, not after.
What do I do if I find a blocked person?
Stop the transaction. Freeze any related property. Then report it to OFAC as the rules require. Keep clear records of what you found and when.
Key Takeaways
A blocked person has frozen property and is off limits to US persons. Most are named on the SDN list, but the 50 percent rule can block firms that are not listed at all. So screen every party, check ownership, and treat near matches with care. If you want help building a screening process that catches blocked persons early, get in touch with our team.