What happens to contracts and business relationships interrupted by a sudden designation?

Designation typically triggers force majeure or illegality provisions in commercial contracts, potentially excusing non-performance by counterparties in sanctioning jurisdictions. Frozen assets cannot satisfy contractual obligations, and counterparties face criminal liability for continued dealings. However, wind-down periods — typically 30–90 days under OFAC general licences — may permit orderly conclusion of existing transactions. Specific licences can authorise completion of discrete contractual obligations where humanitarian or policy considerations apply. Upon successful delisting, contractual rights generally revive, though practical relationship damage and reputational harm often require separate commercial negotiation or litigation to address.