In early 2025, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) introduced an important shift in sanctions enforcement.
For years, sanctions had focused mainly on banks, insurance providers, and major state-linked companies. But as of January 2025, we are seeing a new wave: OFAC’s designations are now increasingly targeting technology providers — including payment platforms, white-label PSPs, cloud-hosting services (CDN, VPS), tokenisation gateways, and embedded APIs — that form the invisible layers of global payments and SaaS infrastructure.
This pivot means that not only financial flows, but also the digital infrastructure that underpins those flows, is now in the sanctions spotlight.
Under Executive Order 14024, several leading FinTech platforms and cloud services were added to the SDN list (Specially Designated Nationals). Critically — no grace period was granted this time. The designations took effect immediately.
What is OFAC and why does it affect international payments?
OFAC administers U.S. sanctions lists — the SDN List being the most impactful for global commerce.
When an entity is added to the SDN List, all of its property and interests are blocked, and any dealings with the listed entity — whether direct or indirect — may result in secondary sanctions for foreign businesses.
Why does this matter globally?
Because any company that:
— uses USD (even indirectly),
— relies on correspondent banking relationships, or
— interacts with U.S.-linked financial markets,
… risks losing access to U.S. dollar clearing or facing asset freezes if it engages in prohibited transactions with sanctioned entities.
Why is the 2025 focus on FinTech and cloud services?
Modern payment chains are multi-layered.
A single payment (via mobile app, e-commerce site, or marketplace) typically touches:
— White-label PSPs,
— API gateways,
— tokenisation and anti-fraud modules,
— cloud-hosted platforms (including embedded SDKs),
— content delivery networks (CDNs),
— and often, multiple backend service providers.
Many merchants and even major PSPs may not be fully aware of which layers their payments or customer data flow through.
OFAC clarified in January 2025:
even indirect interaction with designated entities — such as via cloud hosting, embedded API calls, or white-labelled payment routing — will be treated as “dealing in blocked property.”
This puts an entirely new layer of responsibility on FinTech firms, payment processors, SaaS platforms, and even merchants.
What are the practical risks for companies?
- Payment routes
A white-label PSP or gateway plugin may unknowingly route transactions through blocked infrastructure — exposing both acquirers and merchants to risk of payment delays, chargebacks, or account freezes. - Cloud services
If critical systems (SaaS apps, websites, customer portals) are hosted on servers now blocked by OFAC action, companies face potential service disruption, contract breaches, and legal exposure. - Investment & due diligence
For any investment round, licensing process, or M&A transaction in 2025, demonstrating a fully sanctions-compliant IT and payments stack is now a basic requirement for investors and regulators.
Key concepts to understand
White-label PSP
A payment processor that operates behind other brands or PSPs — its name may not appear to the merchant or customer, but it handles authorisation or clearing.
Embedded SDK/API
Code built into apps or websites that calls external services — such as fraud checks, tokenisation, or transaction routing — which may involve sanctioned providers.
Blocked property
Not just funds or assets — but also rights to use infrastructure, servers, services, or code controlled by SDN-listed entities.
What should companies do now?
- Conduct a full stack audit
Verify not just Tier-1 suppliers, but also all APIs, SDKs, cloud platforms, and backend routing layers. - Prepare migration plans
Move critical services and payment flows to fully compliant PSPs and clean cloud providers (EU, GCC, or other safe jurisdictions). - Update supplier contracts
Incorporate mandatory clauses guaranteeing sanctions-compliant payment rails and hosting. - Report to the board
Provide a clear assessment of risk exposure, migration budget, and timelines. - Prepare investor and banking communications
Sanctions compliance is now a standard part of due diligence for any investment round or banking relationship — and must be proactively addressed.
Why expert support is needed
The current sanctions wave targets deep infrastructure layers — not just front-end transactions.
— Embedded code,
— outdated payment plugins,
— hidden DNS routes,
— backend cloud dependencies — all can trigger exposure if not properly audited.
Missing one of these risks could result in:
— frozen payment flows,
— blocked PSP accounts,
— lost USD clearing access,
— banking or licensing penalties,
— reputational damage with partners and investors.
How ERG helps
ERG’s Sanctions & Digital Compliance practice supports clients to:
— audit payment and cloud infrastructure for hidden sanctions risks;
— map SDK, API, and server dependencies;
— prepare migration plans to clean providers;
— update contractual language;
— mitigate risks for banking and investor relationships;
— engage with regulators if disclosures or clarifications are needed.
Why acting now is essential
The new OFAC designations took immediate effect — no wind-down period applies.
Delaying an infrastructure audit or migration can lead to escalating risk — blocked transactions, frozen accounts, reputational harm, or worse.
Q1 2025 is the window for proactive risk management — before issues arise.
For a rapid audit and practical action plan, contact the ERG sanctions team today.
