THE TREASURY 

2021 SANCTIONS 

REVIEW

October 2021
THE TREASURY 2021 SANCTIONS REVIEW 1

THE TREASURY 2021 SANCTIONS REVIEW1

After the September 11, 2001 attacks, economic and financial sanctions (“sanctions”) became a tool 

of first resort to address a range of threats to the national security, foreign policy, and economy of the 

United States. This tool rests on the formidable strength of, and trust in, the U.S. financial system and 

currency. At their core, sanctions allow U.S. policymakers to impose a material cost on adversaries 

to deter or disrupt behavior that undermines U.S. national security and signal a clear policy stance. 

Treasury’s work on sanctions is conducted in close partnership with other parts of the Executive 

Branch, in particular the Department of State and the National Security Council, which lead the 

formulation of the foreign policy and strategic goals that sanctions serve, as well as the Department 

of Justice. The Department of State also implements certain sanctions authorities in consultation with 

the Treasury. 

Over the last 20 years, the Department of the Treasury (Treasury), in close coordination with the 

Department of State, has successfully employed sanctions to address various national security 

challenges, including: 

•	 Preventing Iran from using the international financial system and commercial markets to 

generate revenue through oil sales and other activities that support its nuclear and ballistic 

missile proliferation and support for terrorist activities. These sanctions pushed Iran to the 

negotiating table on its nuclear program in 2015. 

•	 In coordination with U.S. and foreign law enforcement action, freezing2 and seizing billions of 

dollars in assets from front companies used by the Cali Cartel (at one point the world’s largest 

drug trafficking organization), culminating in the 2014 dismantling of the cartel and the arrest 

and imprisonment of its leaders. 

•	 Protecting tens of billions of dollars in Libyan assets from misappropriation by former 

government officials following civil unrest and the fall of the Qadhafi regime in 2011.

•	 Designating over 1,600 terrorist entities and individuals since 9/11, targeting, exposing, and 

undermining terrorist groups and their operations. For example, U.S. sanctions so significantly 

impaired Hizballah funding streams that in 2019 the organization had to reduce salaries for its 

military arm and media efforts and publicly solicit donations.

1 This document is explanatory only and does not have the force of law. It does not modify statutory authorities, Executive 

orders, regulations, or regulatory guidance. It is not intended to be, nor should it be interpreted as, comprehensive, or as 

imposing requirements under U.S. law, or otherwise addressing any requirements under applicable law. It is not intended to, 

and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the 

United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

2 The primary impact of adding individuals and entities to Treasury’s Office of Foreign Assets Control (OFAC)’s List of Specially 

Designated Nationals and Blocked Persons (“the SDN List”) is that their property and interests in property are blocked. 

When property is blocked (or “frozen”), title to the blocked property remains with the owner of the property and any funds 

constituting or arising from blocked property must be placed into a blocked, interest-bearing account at a U.S. financial 

institution. Blocking immediately imposes an across-the-board prohibition against transfers or dealings of any kind with 

regard to the property. The exercise of powers and privileges normally associated with ownership of blocked property is 

prohibited without authorization from OFAC.
2 THE TREASURY 2021 SANCTIONS REVIEW

When used effectively, sanctions have the capacity to disrupt, deter, and prevent actions that 

undermine U.S. national security. However, the United States now faces new, emerging challenges to 

the efficacy of sanctions as a national security tool: cybercriminals; strategic economic competitors; 

and a workforce and technical infrastructure under pressure from growing financial complexity 

and competing demands from policymakers, market participants, and others. To ensure sanctions 

continue to support U.S. national security objectives, the U.S. government must adapt and modernize 

the underlying operational architecture by which sanctions are deployed. 

These changes are also needed to keep pace with the evolution of the global financial architecture, 

which has a profound impact on the efficacy of U.S. financial sanctions. American adversaries—and 

some allies—are already reducing their use of the U.S. dollar and their exposure to the U.S. financial 

system more broadly in cross-border transactions. While such changes have multiple causes beyond 

U.S. financial sanctions, we must be mindful of the risk that these trends could erode the effectiveness 

of our sanctions. 

In addition, technological innovations such as digital currencies, alternative payment platforms, and 

new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions. 

These technologies offer malign actors opportunities to hold and transfer funds outside the traditional 

dollar-based financial system. They also empower our adversaries seeking to build new financial and 

payments systems intended to diminish the dollar’s global role. We are mindful of the risk that, if left 

unchecked, these digital assets and payments systems could harm the efficacy of our sanctions. 

“I do seriously think we have a responsibility to use sanctions for important national 

security issues. But we need to think about the long-term impact on the global currency.” 

 - Former Secretary of the Treasury Steven Mnuchin 
THE TREASURY 2021 SANCTIONS REVIEW 3

As part of a 2021 review of its economic and financial sanctions, Treasury met with individuals 

representing hundreds of sanctions stakeholders, including Members of Congress and their staffs, 

interagency partners, the private sector, foreign governments, nongovernmental organizations, 

academics, and Treasury’s sanctions workforce. The review focused on two primary issues: (1) the 

framework guiding imposition of economic and financial sanctions and (2) potential operational, 

structural, and procedural changes to improve Treasury’s ability to use sanctions now and in the future. 

This review was neither an assessment of each of the 37 existing sanctions programs3 administered 

and enforced by the Office of Foreign Assets Controls (OFAC), and the over 12,000 OFAC designations 

and nearly 3,000 OFAC delistings, nor a full examination of all economic statecraft tools. In addition, 

the review did not include separate sanctions authorities implemented by the Department of State or 

other restrictive measures implemented by other Departments and Agencies, such as visa restrictions 

or export controls. 

The objective of this review was to ensure that economic and financial sanctions remain an effective tool 

of U.S. national security and foreign policy now and in the future. This report incorporates highlights from 

stakeholder perspectives as well as data and recommendations for improving Treasury’s implementation 

of sanctions. It offers several steps to modernize sanctions to address current policy priorities and keep 

the tool sufficiently nimble to address future threats. These steps include:

3 There are multiple statutory or executive authorities (allowing for the imposition of sanctions based on certain criteria) in 

each sanctions program. Sanctions are most commonly issued pursuant to Presidential authorities that the President has 

delegated to Treasury in certain scenarios. Treasury implements those sanctions pursuant to criteria provided in both the 

underlying statute and the relevant Presidential delegations.
4 THE TREASURY 2021 SANCTIONS REVIEW

Steps to Modernize Sanctions

1. Adopting a structured policy framework that links sanctions to a clear policy objective

Economic and financial sanctions should be tied to clear, discrete objectives that are consistent with 

relevant Presidential guidance—such as countering forces that fuel regional conflict, ending support 

to a specific violent organization or other malign and/or illicit activities, stopping the persecution of a 

minority group, curtailing nuclear proliferation activities, enhancing multilateral pressure, or ceasing 

specific instances of atrocities. To accomplish this, Treasury will adopt the use of a structured policy 

framework in order to inform its recommendations on the use of sanctions. This framework should 

reflect key policy considerations and ask whether a sanctions action: 

a) Supports a clear policy objective within a broader U.S. government strategy: Sanctions should 

be deployed alongside other measures as part of a larger strategy in support of specific policy 

objectives.

b) Has been assessed to be the right tool for the circumstances: Sanctions should incorporate 

rigorous economic analysis, technical expertise, and intelligence to ensure that they are the right 

tool in our national security arsenal to pursue the identified objective.

c) Incorporates anticipated economic and political implications for the sanctions target(s), U.S. 

economy, allies, and third parties and has been calibrated to mitigate unintended impacts:

Sanctions should be designed to tailor their impact so that costs fall on intended targets and that 

potential negative impact on others is minimized.

d) Includes a multilateral coordination and engagement strategy: Where possible, sanctions 

should be coordinated with allies, incorporating shared intelligence and resources, and 

accompanied by engagement with relevant stakeholders including industry, financial institutions, 

allies, civil society, and the media.

e) Will be easily understood, enforceable, and, where possible, reversible: Sanctions should 

be clearly communicated so that targets, allies, and others understand their specific objectives 

and the circumstances under which they may be escalated or reversed in response to the target’s 

behavior.

The consistent application of this sanctions policy framework will establish clear criteria for the use of 

sanctions. Treasury should also seek to develop and implement an analytical construct to assess its 

sanctions programs and actions systematically, incorporating this policy framework and building on 

existing evaluation efforts. The product of these assessments could be recommendations to augment, 

adapt, or wind down individual authorities or to list or delist particular individuals or entities.

“We must guard against the impulse to reach for sanctions too lightly or in situations where 

they have negligible impact.” 

 – Former Secretary of the Treasury Jack Lew
THE TREASURY 2021 SANCTIONS REVIEW 5

2. Incorporating multilateral coordination, where possible

Sanctions are most effective when coordinated as an Administration with allies and partners who 

can magnify economic and political impact. This coordination also enhances the credibility of 

U.S. international leadership and shared policy or security goals of the United States and its allies. 

Coordinated actions also help mitigate the economic impact on American workers and firms. Allies 

and partners can be encouraged to coordinate sanctions policy through: (1) collaboration and sharing 

of policy frameworks and information; (2) ongoing efforts to harmonize sanctions regimes; and (3) 

efforts to build sanctions coordination into existing multilateral fora. These multilateral efforts include 

advocating for UN sanctions when possible and appropriate to ensure global applicability of restrictive 

measures and amplify messaging, as well as working through other multilateral organizations. The 

State Department, in particular, as the U.S. Government interagency lead for the formulation of foreign 

policy, is an essential partner and leader in this work. 

3. Calibrating sanctions to mitigate unintended economic, political, and humanitarian impact 

Treasury should seek to tailor sanctions in order to mitigate unintended economic and political 

impacts on domestic workers and businesses, allies, and non-targeted populations abroad. This will 

protect key constituencies and help preserve support for U.S. sanctions policy. For example, U.S. small 

businesses may lack the resources to bear the costs of sanctions compliance while competing with 

large companies at home and abroad; uncalibrated sanctions could unnecessarily lead them to turn 

down business opportunities in order to avoid these costs. Better tailored sanctions can help avoid 

these costs and maintain the competitiveness of U.S. businesses.

In addition, Treasury must address more systematically the challenges associated with conducting 

humanitarian activities through legitimate channels in heavily sanctioned jurisdictions. Where 

possible and appropriate, Treasury should expand sanctions exceptions to support the flow of 

legitimate humanitarian goods and assistance and provide clear guidance at the outset when 

sanctions authorities are created and implemented, particularly related to vulnerable populations. 

Going forward, Treasury will continue to review its existing authorities to consider the unintended 

consequences of current sanctions regimes on humanitarian activity necessary to support basic 

human needs, as well as potential changes to address them while continuing to deny support to 

malicious actors. We believe this effort is worthy of significant time and effort to ensure the world 

understands that the provision of legitimate humanitarian assistance reflects American values. 

4. Ensuring sanctions are easily understood, enforceable, and adaptable

Sanctions are only as effective as their implementation, especially with regard to communication 

and engagement. In order to better calibrate the use of this tool, Treasury needs to communicate and 

coordinate more effectively with stakeholders affected by the use of financial sanctions. Treasury can 

build on existing outreach and engagement capabilities through enhanced communication with industry, 

financial institutions, allies, civil society, and the media, as well as new constituencies, particularly in the 

digital assets space. 
6 THE TREASURY 2021 SANCTIONS REVIEW

Treasury should enhance its public messaging and engagement with key audiences domestically and 

internationally around its sanctions, ensuring that the messaging augments and closely aligns with key 

stakeholder groups. It should also coordinate closely with the Department of State on messaging for 

foreign engagement. Enhancing the public information on the Treasury website and communicating in 

plain language would also improve public understanding of the intent and effect of sanctions.

5. Investing in modernizing Treasury’s sanctions technology, workforce, and infrastructure 

Modernization requires investing in Treasury’s sanctions workforce and operational capabilities. The 

Department must have the right expertise, technology, and staff to support a robust and effective 

sanctions policymaking and implementation process. These investments will sustain Treasury’s ability 

to execute a core tool of U.S. foreign policy and national security, protect the integrity of the U.S. 

financial system, and build on constructive relationships with a wide array of sanctions stakeholders. 

In particular, Treasury should invest in deepening its institutional knowledge and capabilities in the 

evolving digital assets and services space to support the full sanctions lifecycle of activities.

To better facilitate compliance, Treasury should expand its use of technology to provide critical 

information to domestic and foreign audiences affected by sanctions actions. This includes making 

certain tactical and operational improvements. For example, stakeholders reported that Treasury’s 

public website is viewed as cumbersome to navigate, and could be improved to offer clearer guidance 

to better support humanitarian groups and regulated entities, as well as sanctions targets themselves.

All of these steps must be taken in close coordination with the National Security Council, Department 

of State, U.S. Agency for International Development, Department of Justice, and other interagency 

partners. Sources of sanctions authorities continue to come from both Congress and executive 

orders, and those sources set out authorities, vested often in the President and delegated mainly to 

the Treasury and the Department of State, as well as other federal agencies in some cases. Notably, 
THE TREASURY 2021 SANCTIONS REVIEW 7

the Department of State administers and helps implement numerous sanctions authorities and 

holds a leading role among federal agencies in setting the foreign policy agenda pursued through 

U.S. sanctions. As Treasury pursues these recommendations, especially reinforcing a commitment 

to multilateral coordination, it is essential that the Departments of the Treasury, State, and other 

agencies continue and enhance their strong partnership and close coordination to advance U.S. 

government policy objectives and national security. 

* * *

The United States faces a changing world where financial innovation, shifts in global economic activity, 

and new geopolitical challenges are redefining how economic power can be used to support national 

security objectives. These shifts are accompanied by new and rising threats for which sanctions 

may be a critical tool of U.S. policy. To effectively confront these changes, Treasury must modernize 

and adapt its sanctions policy and operational framework. A refined policy rubric and options for 

modernizing Treasury’s sanctions infrastructure will provide Treasury with the right tools to stay 

ahead of these changes and the adversaries seeking to take advantage of them. Though it will require 

Treasury, and others in the U.S. government, to make difficult decisions about where and when to 

recommend the use of sanctions, doing so will ultimately strengthen Treasury’s use of sanctions 

in the long-term. These changes will lay the groundwork for future Treasury leadership to address 

tomorrow’s challenges.