What Are Secondary Sanctions; How Do OFAC and the FATF Work?

Passing a domestic law does not by itself take Iran off the FATF blacklist; only real enforcement of a standard counts. Secondary sanctions and the FATF are entirely separate institutions, but both run on a predictable calendar. A primary sanction binds only US persons; a secondary sanction threatens non US parties with losing dollar access. In the SDN List update from late August twenty twenty six, a name linked to an Iranian bank got a secondary risk tag. The increased monitoring list is known as the grey list; the call for action list is known as the blacklist. Iran signed an action plan in twenty sixteen; it lapsed, still on the call for action list since twenty twenty. OFAC sits inside the US Treasury; the FATF is intergovernmental and issues no court rulings of its own. After a decision, three scenarios can follow: a risk tag, a general license, or the end of a wind down window. Imagine demand for settlement rising near the end of a hypothetical deadline, then fading once that deadline passes. In this hypothetical example, sixty percent of a forty five day window has already passed. Let's set aside four common mistakes, from conflating the FATF with sanctions to assuming a law alone means delisting. Foreign banks price a country's FATF risk into transfer fees, a slow but persistent effect on Iran's market. This is not abstract, right now: the free market dollar trades near two million and sixty thousand rials. These are calendar events, not random shocks; tools for timing, not for predicting policy. Now you have the answer to the opening question; passing a law is not enough, real enforcement is what matters.