Two outcomes after SDN removal: OFAC’s Hong Kong removals and the screening gap they create.
Some persons removed from the SDN List were simultaneously added to a list that still blocks their property. Here is why that matters for your screening.
Sanctions · 17 Jul 2026
A name coming off the SDN List usually means the prohibition is gone. On July 17, 2026, OFAC published an action where it did not — some persons removed from the SDN List were simultaneously added to the Non-SDN Menu-Based Sanctions List, property still blocked, transactions still prohibited.
What happened
The national emergency behind Executive Order 13936 expired, removing the IEEPA authority for OFAC’s Hong Kong-related designations. OFAC removed from the SDN List persons blocked solely under that authority. But persons still sanctioned under the Hong Kong Autonomy Act of 2020 — a statute that did not expire — moved to the Non-SDN Menu-Based Sanctions List, with property blocked and transactions prohibited except for importing goods. The Federal Register notice expressly distinguishes the two populations. Section A says property of persons blocked solely under the expired EO/IEEPA authority is no longer blocked. Section B says property of the HKAA population remains blocked, with the goods-import exception. There is no third category in that notice of persons unblocked prospectively while all earlier assets stay blocked.
Coverage without consequence is not a control. Confirm the Non-SDN Menu-Based Sanctions List reaches your screening, and that a hit triggers a review of the entry’s actual restrictions and exceptions. A match on that list does not impose the same restriction for every entry.
A removal is not a release. Do not unblock property on the strength of an SDN removal alone — the person may have moved lists, not off them.
What this means for you
This sits inside Treasury’s broader modernization effort — the May 28 removal of 76 outdated SDN entries, June’s Russia-related removals, and now Hong Kong. Directionally welcome, but a list under active revision is a list whose removals require interpretation. In this action, "removed from the SDN List" led to two documented outcomes: unblocking for the EO/IEEPA-only population, or transfer to the NS-MBS List with HKAA blocking continuing and a goods-import exception. Establish which population includes your counterparty before changing a control or releasing property.
Delistings deserve the same review discipline as designations. We help companies read list changes correctly and document the reasoning behind a control change before it is questioned. Contact Zimmermann Law to talk it through.
Sources: OFAC, Hong Kong-related Designations Updates and Removals (July 17, 2026); Notice of OFAC Sanctions Action, 91 Fed. Reg. 46227, 46229 (July 22, 2026), sections A and B; Hong Kong Autonomy Act, Pub. L. No. 116-149, §§ 6 and 8(d), mandatory U.S. federal authority. The operative notice distinguishes the populations; no universal historical-blocking assertion is made. Checked October 2, 2026.
This post is for general information and is not legal advice.
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