Who must generally comply with sanctions programs?

Sanctions are national or international laws and regulations. As with most legal frameworks, their applicability is primarily determined by jurisdiction. Generally, sanctions programs must be complied with by all individuals and entities within the physical territory of the sanctioning authority. Compliance obligations also extend to citizens, permanent residents, and entities incorporated or organized under the laws of that jurisdiction, regardless of where they are located globally. For example, US sanctions apply to all "U.S. persons" (a defined term) and any transaction that occurs in whole or in part within the United States. This jurisdictional nexus is the fundamental basis for sanctions compliance obligations.

B. This is incorrect because not all sanctions programs have universal global reach; compliance is primarily determined by a specific jurisdictional link to the sanctioning authority.

C. This is too narrow; sanctions compliance obligations extend far beyond just international financial institutions to include all persons and entities within a given jurisdiction.

D. This describes secondary sanctions, which are an extraterritorial extension of certain programs but do not represent the general rule for all sanctions compliance.

1. ACAMS Certified Global Sanctions Specialist (CGSS) Study Guide, 2nd Edition, Chapter 2: The Legal and Regulatory Framework of Sanctions. This chapter details the jurisdictional scope of major sanctions regimes (e.g., US, EU, UN), explaining that compliance is primarily based on a connection to the sanctioning jurisdiction, such as nationality, residency, or location. It defines terms like "U.S. Person" to illustrate this principle.

2. U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC). "Frequently Asked Questions." OFAC's guidance consistently states that its regulations apply to "all U.S. persons, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches." This directly supports the principle of jurisdictional application. (See OFAC FAQs, General Questions section).

3. European Union, "EU Sanctions Map." The official guidance on EU sanctions specifies that they apply: "within the territory of the Union," "to any national of a Member State," "to any legal person, entity or body, inside or outside the territory of the Union, which is incorporated or constituted under the law of a Member State," and "to any legal person, entity or body in respect of any business done in whole or in part within the Union." This confirms the jurisdictional basis of compliance.

4. United Nations Security Council, "Sanctions." UN Security Council resolutions imposing sanctions are legally binding on all UN Member States. Each Member State is then responsible for implementing and enforcing these sanctions through its own national laws, which apply within its respective jurisdiction. (See Article 25 and Chapter VII of the UN Charter).