How Sanctions Work

The Trading with the Enemy Act of 1917 first gave Presidents broad power over foreign economic transactions. After abuses, Congress passed the National Emergencies Act in 1976 and the International Emergency Economic Powers Act in 1977. Under IEEPA, the President declares a national emergency over an unusual and extraordinary foreign threat, then issues an executive order blocking property or barring transactions. Dozens of these emergencies are in effect, some dating to 1979, and they must be renewed each year. Congress has also passed country and topic specific sanctions laws, such as the Magnitsky Act of 2012 and the Global Magnitsky Act of 2016 for human rights abusers.

Congress can impose sanctions by law and restrict their removal. The Countering America's Adversaries Through Sanctions Act of 2017 required congressional review before the President could ease Russia sanctions, and the Caesar Act of 2019 targeted Syria. Courts rarely overturn designations, deferring to the executive on foreign affairs, though targets can challenge them under the Administrative Procedure Act. In Learning Resources v. Trump in February 2026, the Supreme Court held that IEEPA's power to regulate importation does not include tariffs, a ruling that left traditional sanctions untouched.

The Office of Foreign Assets Control, inside the Treasury Department, administers most programs. It designates targets, issues general and specific licenses that allow certain transactions, and enforces the rules. The State Department sets policy and leads some designations, including terrorist organizations and state sponsors of terrorism. The Commerce Department's Bureau of Industry and Security controls exports of sensitive goods and technology through the Entity List, and the Financial Crimes Enforcement Network can cut foreign banks off from the U.S. system over money laundering concerns.

Supporters say sanctions are a powerful middle option between diplomacy and war, that they have raised costs on adversaries, slowed weapons programs, and helped bring Iran to the negotiating table before the 2015 nuclear deal. Critics point out that sanctions rarely topple governments or change core policies, that they can hurt ordinary people more than leaders, and that overuse pushes rivals to build payment systems outside the dollar. Others debate whether Presidents have too much unilateral power under IEEPA, since emergencies once declared are rarely ended.

Since 2022, Russia has faced the most extensive sanctions ever placed on a major economy, including frozen central bank reserves and, in October 2025, sanctions on its two largest oil companies. In 2025 the United States restored maximum pressure sanctions on Iran, and in 2026 Treasury expanded them in a campaign against Iranian funding networks. Most Syria sanctions were lifted in 2025 after the fall of the Assad government. In May 2026 an executive order expanded Cuba sanctions, and in September 2026 OFAC consolidated its enforcement and penalty rules into a single regulation.

Comprehensive sanctions bar nearly all trade with a country, as with Cuba, Iran, and North Korea. Targeted or list based sanctions freeze the assets of specific people, companies, ships, and aircraft placed on the Specially Designated Nationals list, which has thousands of entries. Sectoral sanctions restrict certain kinds of dealings, such as new debt for Russian energy firms. Secondary sanctions go further, threatening foreign companies and banks that do business with targets, and are a main reason sanctions bite globally.