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The US Treasury adopts a mechanism of secondary sanctions to enforce compliance with its regulations. Which statement best describes the concept of secondary sanctions?
The concept of secondary sanctions refers to sanctions imposed by the United States on non-US persons or entities that engage in certain activities involving sanctioned jurisdictions, individuals, or sectors. These sanctions apply even though the affected parties are not ordinarily subject to US jurisdiction.
Secondary sanctions are used to discourage foreign actors from engaging in conduct that undermines US sanctions objectives. They do not reflect repeated sanctions, nor are they tied to correspondent banking. They impose consequences irrespective of geographical or jurisdictional boundaries, provided the activity meets defined US sanctionable criteria.
Reference from Sanctions and Compliance Domains:
US Treasury framework defining secondary sanctions and applicability to non-US persons.
Distinction between primary and secondary sanctions.