The expanded and increasingly novel use of targeted economic sanctions programs in recent years has potential ramifications for the derivatives market and there has been limited and inconsistent guidance on how, if at all, sanctions programs are intended to impact derivatives. This paper examines unique aspects of derivatives transactions that can present issues in interpreting how sanctions programs should apply in the context of derivatives and analyses these issues in the context of recent sanctions program experiences.  This paper also proposes eight principles for sanctions authorities to be cognizant of when introducing new sanctions programs or extending existing sanctions programs to ensure the continued safe operation of derivatives markets and minimize market disruption and economic consequences for non-sanctioned entities, without compromising foreign policy or national security goals, conferring any benefit on sanctioned entities or otherwise harming the objectives of any sanctions program.

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