Secondary Sanctions

• Secondary sanctions are primarily associated with sanctions imposed by the US-OFAC (which include sanctions imposed by the UN (Security Council). 
• Secondary sanctions cannot be imposed in-absence of primary sanctions because the objective of secondary sanctions is to strengthen primary sanctions
• Are directed at third-country actors for engaging in certain activities with the targets of existing sanctions, regardless of a direct link to the administering country
• Apply to non-U.S. persons for transactions outside the United States
• Essentially through the imposition of secondary sanctions, the U.S. put the world on notice that non-U.S. companies can choose to do business with the U.S., or countries targeted for sanctions, but not both
• This is crucial for foreign banks.  If the foreign banks do not comply with U.S. sanctions laws, they can be cut off from dollar-based transactions and the U.S. financial system – effectively rendering such international financial institutions useless