"US Sanctions" Are Three Different Regimes
In conversation people lump sanctions into one block. At the regulatory level there are three distinct mechanisms, and different people's problems come from different layers.
Specially Designated Nationals (SDN List). A public list of specific individuals and companies, maintained by OFAC. If your name is on it, every asset under US jurisdiction is frozen and any transaction is prohibited. For most founders and IT professionals this is not the relevant layer.
Sectoral sanctions. Restrictions on dealing with specific industries — defense, energy, financial sector. If you don't control a company in a sanctioned sector, these don't reach you either.
Territorial restrictions. A prohibition on US companies providing certain services to people physically located in Russia. This is where most everyday problems come from: blocked subscriptions, frozen cards, rejected payment processors, suspended cloud accounts.
A careful reader can already see the key distinction. The third regime — the one that affects the most people — is built around physical location, not citizenship.
"Person Located In" — The Phrase That Changes Everything
If you open the underlying executive orders, the prohibition reads, word for word: US companies are barred from providing certain services "to any person located in the Russian Federation." Not "citizens of Russia," but "persons located in Russia."
This is not a loose paraphrase. It's a legal term in a specific document: OFAC Determination signed by Director Andrea M. Gacki on May 8, 2022, issued pursuant to Executive Order 14071 "Prohibiting New Investment in and Certain Services to the Russian Federation." The determination prohibits the export, re-export, sale, or supply — directly or indirectly — of accounting, trust and corporate formation, and management consulting services to any person located in the Russian Federation. Effective June 7, 2022.
The Determination is a public US Treasury document. We posted a scan of the original page, including the OFAC director's signature, on our Telegram channel: t.me/edeal_official/574 — you can see the text reads "person located in," not "citizen of."
The same "person located in" construction runs through most subsequent executive orders and OFAC determinations on Russia. The regulator deliberately built the rule around location rather than passport — because US jurisdiction doesn't have tools to track citizenship globally, but it does have tools to verify actual presence (address documents, banking records, IP, paperwork).
Out of that single phrase grow four scenarios in which the sanctions don't technically apply to you.
Scenario 1. Residency in Another Country
The cleanest path. If you hold a residence permit in a country outside the sanctioned perimeter — Serbia, Türkiye, the UAE, Armenia, Georgia, Thailand, an EU country if you have grounds — you legally stop being "a person located in the Russian Federation." Even if you visit Russia periodically.
The document a bank or service expects in this case is your residency card from the target country. That alone is usually enough to clear KYC and unlock services that are closed to Russian residents.
One important note: a tourist visa doesn't do this job. The regulator treats residency as evidence that the center of your life interests has moved to another jurisdiction — and that's a term with concrete meaning. You need not just the card, but actual life in that country for a meaningful part of the year.
Scenario 2. Actual Relocation Without Yet Holding the Card
The regulator recognizes facts on the ground, not just paperwork. If you've moved, you rent housing, you pay taxes in the host country, your kids attend a local school, you carry local health insurance — and your residency card is still being processed — you still don't fit the definition of "a person located in Russia."
The evidence in this scenario is built from several layers:
- a long-term lease agreement (six months or more)
- tax registration and proof of tax payments
- utility bills in your name
- local health insurance
- an employment contract or sole-proprietor registration in the host country
- bank statements from local accounts for the last three to six months
Banks and services like this scenario less than scenario 1 — because instead of one card you're handing over a package of documents. But it works. With a properly assembled file most fintech services accept it.
Scenario 3. US Citizenship Held Alongside a Russian Passport
A portion of our clients hold a US passport — born in the United States, naturalized, or acquired citizenship through parents. They also hold a Russian passport, and physically live in Russia.
To the US regulator, you are first and foremost a US citizen. The "Russia territorial" sanctions, which target persons located in the Russian Federation, are not in this logic directed at US citizens. The regulator evaluates your status under US law, not under everyday reality.
In practice this means US services, banks, and payment systems treat you as a US person — with the full set of rights and obligations. Including, by the way, US tax reporting duties that apply to US persons regardless of country of residence.
Scenario 4. An Active Green Card
A Permanent Resident Card (LPR status) makes you a US resident for all practical purposes, sanctions regime included. If you are temporarily in Russia but your LPR status remains valid — confirmed by a non-expired re-entry permit or the appropriate stamp — your legal "place" is the United States.
A nuance worth keeping in mind: an extended absence from the US — especially uninterrupted absence longer than a year — can put the LPR status itself at risk on re-entry. That's an immigration concern, not a sanctions one. But while the status is active, OFAC's territorial restrictions don't apply to you.
What This Unlocks in Practice
Once you fit one of the four scenarios, a set of doors that are closed to "persons located in Russia" opens:
- opening accounts at foreign banks without a KYC-stage rejection
- access to fintech infrastructure: Stripe, Wise, Mercury, PayPal, Payoneer
- working with cloud providers: AWS, Google Cloud, Microsoft Azure
- onboarding to freelance platforms and service marketplaces
- accepting payments from international clients without freeze risk
- legally clean documentation flow with US counterparties
This isn't "circumvention" in the negative sense. It's working inside a law that was explicitly written for persons not located in Russia. The regulator drew that line itself, and any individual physically outside Russia can rely on it.
What This Article Is Not
It is not an invitation to break Russian law. It does not teach you to mask your location, use fake documents, or mislead compliance officers. It does not promise that any bank will automatically accept your documents — every institution has its own risk policy, and that policy can be stricter than the regulator requires.
It is not a substitute for personal advice. Sanctions law is a field where general rules coexist with dozens of exceptions, general licenses, country-specific nuances, and grey zones. Any decision should be based on an analysis of your specific situation.
What to Do Next
If you recognize yourself in one of the scenarios, start not with action but with an inventory.
- What is your legal status right now?
- Where do you physically spend more than 183 days a year?
- Which documents can you already produce, and which do you still need to gather?
If none of the scenarios describe your situation yet, the choice reduces to two strategic moves:
- Get a residency in a suitable jurisdiction — pick the country by basis (investment, remote work, study, digital nomad), go through the process, obtain the status.
- Relocate in fact and assemble an evidence base — move, start paying taxes locally, secure a long-term lease, accumulate local paperwork, and run the residency application in parallel.
At Edeal we structure this path as a decision tree: country → basis for status → budget → timeline → document package. Every week we work through several of these for entrepreneurs, IT professionals, and investors.
The main point of this piece: between "I'm under sanctions" and "I'm fully unaffected" sits a wide space of legal options. In our experience, almost everyone finds theirs somewhere inside that space.
Want to check which scenario fits you?
Edeal works through sanctions scenarios every week — country → basis → budget → timeline. Free 30-minute consultation to map yours.