Guided walkthrough · 10 minutes
One payment, four regimes
One hypothetical payment, asked of every regime at once. Scroll — the panel on the left relights at each step, and you watch the four answers come apart.
Structure as at 2026-08-24
This explains how the five regimes are constructed and where they diverge. It is not legal advice, it states no view on whether any particular party or transaction is caught, and it deliberately contains no statement of who is designated today — list state changes weekly and belongs at the official sources cited throughout.
The payment
- A Geneva-incorporated commodity trader pays USD 2,000,000 to a Cyprus-incorporated counterparty for a cargo.
- The Cyprus company appears on no sanctions list. It is owned 40% by one designated person and 30% by another.
- The payment is in dollars, so it clears through a correspondent bank in New York.
- The trader's treasury manager in Geneva is a British national. The deal is approved by a US-citizen compliance officer sitting in London.
What each regime says here
A hypothetical, built to teach the architecture. It states no view on any real party or transaction.
Step 1
One payment. Five regimes. Do not start with a list.
The instinct is to paste the counterparty's name into four search boxes, find nothing, and release the payment. Every regime below can be engaged by this payment even though the payee appears on no list at all. The lists are finding aids; the law is elsewhere. So start with the instruments, and ask each one the same four questions in order: does it reach me, what does it prohibit, does it reach this counterparty, and what would let the payment through.
Step 2
The apex explains why the four lists disagree
Most designations in the country and counter-terrorism regimes begin at the UN Security Council, which binds member states and no one else. The obligation on this trader arrives only once a state has written the measure into its own law — a Council Regulation, a statutory instrument, a Federal Council ordinance. Each transposition happens on its own timetable, by its own procedure. That is not administrative slippage; it is the architecture, and it is why four lists checked on the same morning will not match.
Step 3
Who is bound? Four different answers to one question
The trader is Swiss-incorporated and sits in Geneva — so Swiss law reaches it on territory. But the UK regime follows a UK person anywhere in the world, and there is a British national on the treasury desk. The EU clause reaches business done in whole or in part within the Union, and the counterparty is a Cyprus company. And the American compliance officer in London is a US person wherever they sit. Four regimes, four separate hooks, none of which required the trader to be in the country whose law now applies.
Step 4
The dollar leg brings a fifth hook nobody chose
The parties are Swiss and Cypriot; the currency is American. Clearing dollars means routing the payment through a US correspondent bank, and that touch is itself a US nexus — the funds come within the United States. Nobody selected US jurisdiction; the choice of settlement currency did it. This is the single most common way a purely European transaction acquires an American legal problem, and re-denominating after the fact does not unwind it.
Step 5
Nobody on a list is being paid — and that settles nothing
The payee is not designated. What matters is who stands behind it: two designated persons holding 40% and 30%. Every one of these regimes extends beyond the named party to entities their designated persons own or control, precisely so that a listing cannot be defeated by incorporating a company. So the real question is not whether the payee is on a list. It is whether the ownership test of each regime is met on these numbers — and here the regimes stop agreeing.
Step 6
70% aggregate — and the answers split cleanly in two
Add the holdings and you get 70%. Under OFAC's 50 Percent Rule that aggregation is the whole test: 50% or more held in total by blocked persons, and the company is blocked automatically, whether or not OFAC has ever named it. The SDN List is not a complete list of blocked parties. Under the EU and UK tests, no single holder exceeds 50%, so the ownership limb is not made out on these numbers — and the question becomes control, which is a matter of evidence about who actually directs the company. Same structure, same morning, opposite starting points.
Step 7
The prohibition most people forget is the wider one
Even where an asset freeze is not directly in issue, every regime carries a second, broader prohibition: making funds or economic resources available, directly or indirectly, to or for the benefit of a designated person. Indirectly and for the benefit are doing enormous work. Paying an unlisted intermediary that will pass value up to a designated owner is squarely within it, and so is supplying goods, credit or services that free up value. The freeze is about accounts; this is about benefit, and it is where most breaches actually happen.
Step 8
If the payment is legitimate, four different counters
Suppose there is a good reason for the payment — a pre-existing contract, legal fees, an insurance premium. Each regime has a route, and the routes are not alike. OFSI and OFAC each publish general licences you can rely on without applying, and grant specific licences on application. Switzerland goes to SECO. The EU has no central licensing authority at all: the derogation is granted by the competent authority of the relevant member state, named in the annex to the Regulation. One transaction, four applications, and no guarantee the answers arrive together or agree.
Step 9
Two of the four will not ask whether you knew
This is where the compliance programme earns its cost. OFSI may impose a monetary penalty on the balance of probabilities without showing that the firm knew or had reasonable cause to suspect it was breaching a prohibition — the knowledge test was removed with effect from 15 June 2022. OFAC's civil penalties under IEEPA have long operated on the same strict basis, with criminal liability reserved for wilful violations. Switzerland prosecutes criminally under the Embargo Act. The EU had no harmonised criminal standard at all until a 2024 Directive required member states to legislate one.
Step 10
And one conflict that has no clean answer
The regimes do not merely differ — in one place they contradict. The EU Blocking Statute prohibits EU operators from complying with the US extraterritorial measures listed in its annex, so where it applies, an EU entity within a US group can face a US penalty for acting and an EU penalty for not acting. There is no drafting that satisfies both. That is worth knowing before it is discovered mid-transaction, and it is the clearest possible demonstration of why screening against one regime and assuming the rest follow is not caution — it is exposure.
That is the shape of the problem. The sourced comparison behind every step — with the instrument, provision and official text for each — is on the hub: