Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1422677
7 OFAC RELEASES 2021 SANCTIONS REVIEW On October 18, OFAC released the results of a broad review of current U.S. economic and financial sanctions and issued recommendations to ensure sanctions remain an effective tool of U.S. national security and foreign policy. The Review's publication is the product of a nine-month audit during which U.S. Treasury officials met with hundreds of stakeholders, including members of Congress, former Treasury officials from various Administrations, the private sector, foreign governments, NGOs, and even Treasury's own sanctions workforce. The Review's objectives were two-fold: • First, to evaluate the framework that guides the imposition of sanctions, and • Second, to identify the potential operational, structural, and procedural changes to improve the use of sanctions going forward. When used effectively, the Review begins, "sanctions have the capacity to disrupt, deter, and prevent actions that undermine U.S. national security." Among the successes touted by the Review are the isolation of Iran from the international financial system to hinder its nuclear and ballistic missile proliferation efforts; the freezing of assets of drug cartels; and, by designating over 1,600 terrorist entities and individuals, success in undermining terrorist operations around the world. However, the Review notes that the continued success of sanctions is threatened by challenges posed by cybercriminals, strategic economic competitors, and the pressure applied to OFAC's workforce and technical infrastructure from growing market complexities. To meet these emerging challenges, the Review acknowledges that U.S. sanctions need modernization and identified five steps to mitigate those challenges and strengthen the effectiveness of Treasury's sanctions program. 1. Adopt a policy framework that links sanctions to a clear policy objective. The Review stressed that sanctions actions must be tied to clear objectives that are consistent with Presidential guidance, whether that objective be addressing human rights violations or curtailing nuclear proliferation activities. To establish clear criteria for the use of sanctions and thus implement the framework, before imposing