Issue Summary
The United States has increasingly used sanctions in recent years to serve a range of foreign policy goals. For example, the United States has imposed a broad range of sanctions on Russia in response to its invasion of Ukraine. The United States has also imposed sanctions on Venezuela targeting those involved in actions or policies undermining democratic processes or institutions. Sanctions may place restrictions on a country’s entire economy, targeted sectors of its economy, or individuals or corporate entities. Economic restrictions can include denying a designated entity access to the U.S. financial system, freezing an entity’s assets under U.S. jurisdiction, or prohibiting the export of restricted items.
A number of federal agencies play a role in implementing sanctions—including developing policy, identifying targets, and prosecuting violators. The Departments of Treasury, State, and Commerce each have units dedicated to implementing sanctions. For instance, Treasury’s Office of Foreign Assets Control is the largest federal office dedicated to implementing sanctions. However, this office has faced challenges hiring staff to meet its growing workload—such as competition with other agencies and the private sector, and long lead times for acquiring needed security clearances. Federal agencies also face other challenges in effectively implementing sanctions and assessing their effectiveness.
For instance:
- Sanctions and export controls on Russia. The U.S. and its allies have frozen billions in Russian assets and controlled exports of important technologies to Russia in response to the war in Ukraine. However, Russia has taken actions to mitigate the impact of these restrictions. Russia’s economy declined after the invasion and sanctions in 2022 but recovered somewhat afterward. Moreover, export restrictions have hindered but not completely prevented Russia from obtaining technologies critical to its war effort. U.S. agencies should set targets to help measure the effectiveness of their sanctions and export controls on Russia.
Tanker used to evade sanctions on Russian oil
Image
- Effectiveness of sanctions. Federal agencies do not conduct comprehensive assessments that measure how effective sanctions are in meeting U.S. foreign policy goals. Challenges to measuring the effectiveness of sanctions include difficulties in isolating sanctions’ effects from other factors, shifting policy goals and objectives, and the lack of reliable data.
- Digital assets. Virtual currencies such as Bitcoin and other digital assets may pose risks to implementing and enforcing U.S. sanctions. U.S. agencies have tried to reduce these risks by taking enforcement actions against entities for using digital assets to evade sanctions and working with international partners to better protect the global financial system from illicit activity.
