Treasury Hoping to Better Address Sanctions Evasion Practices, Yellen Says
The Treasury Department’s upcoming budget proposal will ask for more money to address sanctions evasion practices, Treasury Secretary Janet Yellen told a House Appropriations subcommittee May 27. Yellen said the agency is focused on limiting evasion tactics and is hoping to collaborate more with allies to address those issues and increase the overall effectiveness of economic sanctions.
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Treasury’s budget will request more funding for an “expanding portfolio” that addresses sanctions evasion, which has “become much more important in recent years,” Yellen said. “The resources we've devoted to it have increased substantially,” she said.
The agency also plans to work more closely with allies to catch evasion practices, Yellen said. “Certainly there are efforts at evasion of sanctions, and this is something that we try to address to the maximum extent possible,” she said, adding that the agency has worked closely with countries in the Middle East to address evasion tactics by Hamas.
“When we're working jointly with our allies, the odds and the difficulty in evading sanctions becomes higher, and that's one important reason I think we need to collaborate with other countries in imposing sanctions,” she said.
Yellen also said the agency is still undergoing a review of its sanctions programs that was started earlier this year and includes “the possibility of coordinating more closely with other countries.” The review, led by Deputy Treasury Secretary Wally Adeyemo (see 2102230047), also hopes to lead to more “clearly defined” goals around the Office of Foreign Assets Control’s sanctions regimes, she said.
Sanctions should be “part of a broader integrated strategy,” Yellen said. Adeyemo “is going to be focusing on identifying conditions that make for the successful use of sanctions, and try to understand what other complementary actions need to be taken.”
The agency is also hoping to better craft sanctions programs so that they don’t hurt U.S. businesses, Yellen said. She urged U.S. companies to apply for an exemption license at OFAC and said the agency is “ready and willing and able to work with individuals or firms” that “believe they deserve exemptions.”
OFAC is also “always worried” about the impact of sanctions on humanitarian aid. Nonprofits and charitable groups have criticized U.S. sanctions for unintentionally impeding shipments of medicine and other humanitarian goods to sanctioned regions (see 2105260047). “This is sometimes quite difficult, but it is a priority,” Yellen said. OFAC wants to “change the behavior of countries that are engaging in actions that harm the United States, but not to harm the individuals within these countries.”