The “Sanctions Modernization” Initiative: Treasury’s Official Position

On May 28, 2026, the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) published a batch SDN List update removing 76 entries – and, unusually, accompanied it with a formal press release explaining why.

Treasury titled the release “Treasury Begins Sanctions Modernization Effort by Removing Outdated Entries“. The initiative had been flagged as a priority by Treasury Secretary Scott Bessent at the No Money For Terror conference in Paris shortly before.

Treasury’s core argument is that a bloated SDN List is less effective. When compliance teams at banks and financial institutions must screen against thousands of stale entries, their attention is diluted, and the designations that actually matter get lost in the noise.

At the same time, a U.S. administration official made clear that SDN List removals do not signal any broader shift in U.S. policy toward a particular country. The removals are “preventive” in nature – part of an effort to modernize OFAC’s sanctions practice overall. As part of that ongoing maintenance, OFAC “regularly adds and removes persons” following a detailed internal review. And as the Treasury Secretary reiterated, sanctions “are designed not to punish, but to change behavior and ensure accountability.”

May 28 should be read as administrative list hygiene, not a policy shift. That said, Treasury’s stated rationale is probably not the only factor at work. Practical drivers may include better screening quality, fewer false positives, reduced compliance burden on financial institutions, and a leaner list better positioned for targeted enforcement going forward.

Four Categories of Removed Entries

Treasury’s press release identified four grounds for removal:

• Deceased individuals;
• Vessels that have been scrapped or taken out of service;
• Individuals designated in connection with illicit financial networks that no longer exist;
• Individuals designated several years ago for whom there is insufficient identifying information to support continued screening and who OFAC has assessed no longer pose a current threat.

The Russian Segment: Kolbaev, Sechin Jr., and State Duma Members

Kamchybek Kolbaev (“Kolya-Kyrgyz”)

This one is straightforward. Kolbaev, one of the most prominent thieves-in-law in the post-Soviet world, was designated under the Transnational Criminal Organizations (TCO) program during the Biden administration. He died in Bishkek on October 4, 2023. His entry remained active on the SDN List for nearly two and a half years after that. The removal is technical: OFAC cleared the record of a deceased individual. There is no political dimension here.

Ivan Sechin

Igor Sechin’s son was added to the SDN List under Executive Order 14024 as a person linked to his father (“Linked To: Igor Sechin”). One practical point is worth emphasizing: Ivan Sechin’s delisting does not affect the sanctions on Igor Sechin himself or on Rosneft – both remain on the SDN List. The basis for removal is the same technical one as Kolbaev’s: the clearing of a deceased individual’s record.

State Duma Deputies and Members of the Federation Council

The ten delisted deputies and senators share a feature that matters beyond the fact of their deaths. In February 2022, they were added to the SDN List in bulk, along with hundreds of parliamentarians designated under Executive Order 14024 by virtue of their legislative membership, rather than in connection with publicly articulated individual allegations of sanctions evasion or participation in specific financial schemes. It is precisely this feature that becomes significant in the context of potential litigation (see below).

What This Means for Designated Persons

The “sanctions modernization” initiative has several practical implications for individuals currently on the SDN List and considering an OFAC delisting 2026 petition.

First, OFAC has confirmed that delisting is a functional tool and not an aberration. The agency stated directly that “the strength and integrity of OFAC’s sanctions are defined not only by the ability to add persons to the SDN List, but also by the willingness to remove them in accordance with the law.”

Second, the criteria laid out in Treasury’s press release provide useful benchmarks for evaluating the merits of an OFAC delisting 2026 petition under 31 C.F.R. § 501.807. Where an individual was designated solely based on a formal affiliation with a designated entity rather than their own conduct and no longer holds the position that gave rise to that link, the grounds for delisting can be strong.

Third, the claim that this large-scale delisting reflects a political concession to Russia finds no support either in the identities of the persons removed or in the Treasury’s own explanation. Every Russian individual delisted in this action was deceased. The measure appears to be a routine administrative housekeeping exercise rather than a step connected to any diplomatic initiative or negotiation.

A Possible Factor: Preparing for Potential Litigation

Treasury did not frame the delisting initiative in terms of litigation risk, but that factor is worth considering. Carrying outdated or operationally dormant designation files on the SDN List can generate procedural costs for the agency when a designation is challenged in court. Where the original evidentiary basis has aged significantly, the sanctions rationale has weakened, or the enforcement value of a designation has become marginal, voluntarily removing the entry may be a more rational choice than defending it in federal court.

This is particularly relevant for individuals designated through broad batch actions or on the basis of associations with other designated persons. In federal court challenges involving such designees, the litigation often turns not on national security grounds but on whether the individualized sanctions rationale was legally sufficient.

Key Takeaways

The May 28, 2026 action reinforces several consistent patterns in how OFAC operates.

OFAC delisting 2026 is possible even during active sanctions campaigns. At the same time, it is not a signal of general détente. Removal grounds are assessed case by case, and a designee’s death, loss of affiliation, or changed circumstances can each be found sufficient.

Judicial pressure remains one of the most effective tools for accelerating administrative review of a delisting petition. The Zadornov case (April 2026) and the Buriko case (December 2025) both confirm that a federal court action filed alongside an administrative petition creates real procedural leverage over the agency.

Finally, designated persons and their counsels should track administrative updates like this one in real time. They reflect OFAC’s current operational thinking and can provide useful building blocks for a legal strategy.