From: U.S. Department of the Treasury <subscriptions@subscriptions.treas.gov>
Date: Fri, May 30, 2014 at 6:52 AM
Subject: Sanctions 101, Part I of II: A Powerful Financial Tool
To: iammejtm@gmail.com
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In the past few months, the President has announced a number of new sanctions authorities to disrupt the activities of those stoking instability in Ukraine, those committing human rights abuses in the Central African Republic, and those directing violence in South Sudan. The Administration also is using targeted sanctions to confront other regional threats and to expose and combat narcotics trafficking and organized criminal organizations, proliferators of weapons of mass destruction, and terrorist groups. The sanctions surge in recent years has provoked increasing interest from the public and this two-part "Sanctions 101" aims to answer some questions about this powerful tool. Who is responsible for implementing and enforcing sanctions at the Treasury Department? The Treasury Department's Office of Terrorism and Financial Intelligence (TFI) harnesses intelligence, policy, regulatory, and enforcement capabilities with the twin missions of (1) defending the U.S. and global financial systems against abuse and (2) using financial intelligence and authorities to combat those who threaten our nation's security and core objectives. The Office of Foreign Assets Control, or "OFAC," is the sanctions office within TFI. OFAC administers and enforces the financial sanctions at the heart of so many U.S. national security policies today. When deployed effectively, these tools can disrupt weapons of mass destruction procurement rings, suffocate narcotics and criminal cartels, degrade the capabilities of terrorist groups, and alter the decision making of threatening regimes.
How are new sanctions programs created? The International Emergency Economic Powers Act and other legislation provide the President with the authority to deploy and enforce financial sanctions in response to specified or declared national emergencies. These authorities then allow the President to prohibit or restrict transactions and freeze property to confront the declared emergency. The funds or relevant property of the designated person stay in the hands of the bank, company, or individual that reported them to the Treasury but must be strictly maintained consistent with OFAC regulations. Typically, the President will delegate new sanctions authorities to the Treasury Department through the signing of an Executive Order. At that point, OFAC will issue regulations and guidance that further explain the obligations and parameters of the sanctions and set out how licenses can be sought to authorize transactions that would otherwise be prohibited.
How does OFAC develop targets for sanctions? Where so directed by statute or an Executive Order, OFAC will gather information and build cases against those contributing to the national emergency. To do so, OFAC draws on information provided by law enforcement and intelligence agencies, foreign governments, United Nations expert panels, and any other reliable information it can obtain. Similar to the way a prosecutor prepares an indictment, OFAC will then assemble all of the relevant information and draft an evidentiary memorandum that sets out why the agency has concluded that the targeted person meets the criteria specified in the sanctions authority. This information gathering phase is intensive and can be quite time consuming, as OFAC will only move a case forward upon solid information from reliable sources. Our cases are then reviewed by attorneys at the Treasury Department and the Justice Department. Before taking action, we coordinate closely with a number of government agencies – including the State Department, the intelligence community, and others – to ensure that our actions are consistent with and complement other U.S. government activities. Once our case is complete, I sign what is known as a designation memorandum, designating the target(s) for sanctions. The action is given public effect by placing the target(s) on OFAC's List of Specially Designated Nationals ("the SDN list").
How can someone know which individuals or entities are sanctioned? OFAC's SDN list, which currently includes nearly 6,000 sanctioned individuals and entities, is frequently updated. All updates are immediately disseminated via RSS feed and through our website and published in the Federal Register. All U.S. financial institutions and other holders of relevant assets must block them immediately and have up to 10 days to report those blocked assets to OFAC. If you have questions about whether an individual or entity is listed on OFAC's SDN list, OFAC hosts a flexible online SDN search tool, which allows for searches based on partial names and other limited information.
More sanctions 101 Q&A's to follow on Monday.
Adam Szubin is the Director of the Office of Foreign Assets Control at the United States Department of the Treasury.
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Jeremy Tobias Matthews
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