OFAC Sanctions Palestine Action and Far-Left Groups: What GCs Must Do Now

What OFAC Has Done and Why It Matters Beyond US Borders

The US Department of the Treasury's Office of Foreign Assets Control has added three organisations and two individuals to the Specially Designated Nationals and Blocked Persons list under Executive Order 13224, the primary post-September 2001 authority for blocking the assets of designated terrorists and their supporters. The three entities are UK-based Palestine Action, the Masar Badil Palestinian diaspora network, and the Italian digital-infrastructure collective Autistici/Inventati. The designations took effect immediately upon publication.

For general counsel outside the United States, the instinct is sometimes to treat OFAC actions as a domestic American matter. That instinct is wrong. EO 13224 blocks all property and interests in property of designated parties that are in the United States or in the possession of US persons, and it prohibits US persons from engaging in virtually any transaction with a designated entity. Because the dollar remains the dominant currency in global trade, and because US correspondent banks clear dollar payments, any transaction routed through the dollar payment system is captured. Non-US companies that knowingly facilitate prohibited transactions may also face secondary-sanctions exposure and, increasingly, parallel enforcement by their own regulators following US designation announcements.

Who Is Bound and From When

EO 13224 designations bind US persons immediately and globally. A US person is any US citizen or permanent resident, any entity organised under US law (including foreign branches), and any person physically present in the United States at the time of the transaction. The effective date is the date OFAC publishes the designation notice, which in this case was August 2025.

For non-US companies, binding effect depends on local law. The United Kingdom, the European Union, and many other jurisdictions operate their own autonomous sanctions regimes that do not automatically mirror OFAC lists. However, the UK's Office of Financial Sanctions Implementation and the EU's external-action framework each have their own designation procedures, and a US OFAC action frequently precedes or accelerates equivalent domestic action. Compliance teams in London, Frankfurt, Singapore and Sydney therefore cannot simply wait to see whether their own regulator acts. Reputational, correspondent-banking, and contractual risk arise well before a domestic designation follows.

The Immediate Contract Review Obligations

Any contract your organisation holds with a counterparty that has been sanctioned, or with any entity in which a sanctioned party holds fifty per cent or more of an ownership interest, is potentially unenforceable from the moment of designation. The OFAC fifty-per-cent rule means that even an indirect ownership stake can render an entire contractual relationship prohibited.

GCs should immediately run the three newly designated entities and the two designated individuals through contract-management systems to identify:

• Active agreements where a designated party is named as a counterparty, beneficiary, or service provider
• Grant agreements, sponsorship contracts, or data-hosting arrangements (given Autistici/Inventati's role as a digital-infrastructure provider, cloud and hosting contracts deserve particular scrutiny)
• Payment obligations due within the next 30 days that would route through US correspondent banks

Where a match is found, legal teams should determine whether an OFAC licence is required before any action, including termination, is taken. Terminating a contract with a sanctions target without a licence can itself constitute a prohibited transaction in some circumstances. Seek specialist sanctions counsel before acting.

Sanctions Clauses: Are Your Templates Up to Date

A sanctions clause in a commercial contract typically gives either or both parties the right to suspend performance or terminate if a counterparty becomes a designated person. The quality of those clauses varies enormously in practice. Some refer only to OFAC; others capture UN, EU, and UK lists as well. Some include representations that the counterparty is not a designated person at the time of signing; others extend that representation on a continuing basis for the life of the agreement.

The Autistici/Inventati designation is a useful reminder that sanctions exposure can arise in technology and infrastructure contracts, not only in trade-finance or commodities agreements. If your standard technology-services template does not include a sanctions representation and a termination right triggered by designation, it should. Adira's contract-drafting engine can insert jurisdiction-appropriate sanctions language calibrated to the counterparty's domicile and the governing law of each agreement.

Multi-Jurisdictional Considerations for Law Firms Advising Global Clients

Law firms advising multinational clients face a layered compliance picture. Palestinian-solidarity and activist organisations operate across many jurisdictions, and the designation of Palestine Action, which is headquartered in the United Kingdom, raises particular questions for UK-law firms and UK-domiciled clients. At present, Palestine Action does not appear on the UK Consolidated List of financial sanctions targets. UK persons are therefore not prohibited under UK law from transacting with it, though they remain prohibited from doing so if the transaction involves a US-person nexus or dollar clearing.

Clients in the EU face a comparable bifurcation. The designations also highlight the continuing divergence between the US approach to far-left or ideologically motivated groups and the more cautious designation practice of many allied governments. This divergence creates genuine compliance complexity: a transaction lawful under UK or EU law may nonetheless be prohibited for a US subsidiary of the same group, or for any payment routed in dollars. Experienced sanctions counsel, and contract-management platforms that surface governing-law and currency-routing conflicts automatically, are both essential tools in this environment.

Practical Steps for General Counsel Starting Today

First, run an immediate screen of your contract database against the newly published SDN entries. Second, freeze any pending payments to the three organisations pending legal review. Third, brief your treasury and accounts-payable functions on the designation so that future invoices are flagged before processing. Fourth, review your standard contract templates to confirm that sanctions representations, ongoing-compliance covenants, and licence-conditioned termination rights are present and appropriately scoped. Fifth, monitor the UK OFSI and EU Official Journal for parallel designations, which may follow within weeks.

Sanctions law moves faster than any manual contract-review process can match. Organisations that have embedded automated screening and clause-generation into their contract lifecycle will surface exposure in hours rather than weeks.