Review of Treasury Sanctions for 2021

Blog / Review of Treasury Sanctions for 2021

The Treasury Department issued its 2021 Sanctions Review on October 18, 2021, which contains suggestions for maintaining the efficacy of sanctions in the face of escalating geopolitical difficulties. Treasury perceives a growing gap between the present sanctions system and the world it operates in due to new cybercriminals, global economic shifts away from the US currency, and workforce and technical infrastructure limitations. The Sanctions Review outlines patterns in the present US sanctions landscape that may lead to specific steps affecting the business sector.

Increasing Use of Sanctions Statistics

Following the September 11 attacks, the US has targeted over 1,600 terrorist entities and individuals since the attacks, according to the Sanctions Review. The Sanctions Review identified the following major sanctions data over the decades:

  • The number of sanctioned parties has climbed 933 percent in the last two decades, from 912 in 2000 to 9,421 this year.
  • During the same time span, OFAC delisted roughly 3,000 people, or a fourth of the total.
  • From 69 in 2000 to 176 in 2021, the quantity of fundamental sanctions bodies.
  • Over the previous two decades, the ratio of executive to legislative branch acts has remained essentially stable (64 percent executive orders/36 percent statutes in 2000 vs. 61 percent executive orders/39 percent statutes in 2021).

Modernizing Sanctions

Despite the positive numbers, the Sanctions Review underlined that the Treasury must rethink its sanctions in a quickly changing modern world. According to Treasury, in order to modernize sanctions and maintain their efficacy as a political and economic instrument, the following five important proposals should be implemented.

global sanctions lists that businesses need to consider

Align Sanctions with a Policy Goal

Treasury intends to create a clear policy framework that will provide criteria for the deployment of sanctions. Treasury wants to build a rigorous procedure to analyze its sanctions programs and actions. To that purpose, Treasury advises that while deciding whether to impose sanctions:

  • Support a major goal of US policy
  • Been carefully selected as the best instrument for the policy goal
  • Prevent unforeseen economic, political, and humanitarian consequences
  • Adopt a multilateral strategy
  • They are simple to understand, enforceable, and reversible.

Coordination of Sanctions with Partners

Cooperation among US allies and partners strengthens US sanctions and lowers their impact on non-targeted parties. By harmonizing multilateral sanctions regimes, the US amplifies its message and globalizes its actions. After Russia invaded Ukraine in 2014, the US could only deploy sanctions as vigorously as its European partners. If the US adopted a more robust sanctions approach than its European partners, the US might be undermined in its relations with Russia. Multilateralism supports sanctions policy by reducing non-compliance.

Optimize Economic, Political, and Humanitarian Sanctions

So that the public has faith in US sanctions, Treasury should adjust them to target non-targeted populations. Treasury emphasized that sanctions might harm small domestic businesses that cannot afford to comply with penalties while competing with larger firms. Sanctions can also hinder humanitarian supply lines. In August 2021, the Taliban took over Afghanistan. After the fall of Kabul, the US Treasury Department's Office of Foreign Assets Control (OFAC) granted general licenses to assist the flow of humanitarian supplies to the Afghan people and offered clear guidelines to the world community on how they might contribute. As a result, Treasury advises that it should review the possible impact of sanctions on third parties and reconsider its implementation strategy in its Sanctions Review.

Improve sanctions communication

Treasury advises increased transparency by educating the public on the purpose and impact of penalties. Sanctions are only as powerful as their implementation," says the Sanctions Review. Treasury emphasized the need for better sanctions messaging and penalties to be simply understood, enforced, and adaptable. Treasury also emphasized the significance of strengthening its public messaging, addressing important audiences, and website content.

Invest in Sanctions Technology, Workforce, and Infrastructure

Treasury understands the need to invest in its people, technology, and operational infrastructure to meet new and developing issues, including cybercrime and the rising usage of virtual assets. All of these efforts should be coordinated with Treasury's interagency partners to increase information dissemination concerning sanctions.

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