OFAC Outreach and Engagement Capabilities Enhancement Act

Subjects: International Affairs


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1164 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 1164

 To require the Comptroller General of the United States to conduct a 
 study with respect to outreach activities performed by the Office of 
            Foreign Assets Control, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 24, 2023

  Mr. Lynch introduced the following bill; which was referred to the 
                      Committee on Foreign Affairs

_______________________________________________________________________

                                 A BILL


 
 To require the Comptroller General of the United States to conduct a 
 study with respect to outreach activities performed by the Office of 
            Foreign Assets Control, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``OFAC Outreach and Engagement 
Capabilities Enhancement Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Office of Foreign Assets Control is the United 
        States Government agency responsible for administering and 
        enforcing economic sanctions programs, primarily against 
        countries and groups of individuals, such as terrorists and 
        narcotics traffickers.
            (2) All United States persons must comply with OFAC 
        regulations, including all United States citizens and permanent 
        resident aliens regardless of where they are located, all 
        persons and entities within the United States, all United 
        States incorporated entities and their foreign branches. In the 
        cases of certain programs, foreign subsidiaries owned or 
        controlled by United States companies also must comply. Certain 
        programs also require foreign persons in possession of United 
        States-origin goods to comply.
            (3) While the sanctions announcements are themselves notice 
        of the requirements placed on all United States persons, OFAC 
        conducts additional outreach through its compliance office, 
        serving as OFAC's primary liaison to the private sector and 
        operating OFAC's public ``hotline'' for sanctions-related 
        questions and the conduct of civil investigations for potential 
        sanctions violations.
            (4) While many industries, such as large multinational 
        financial institutions and industrial firms, have sophisticated 
        sanctions departments to manage compliance with the strict-
        liability mandates from OFAC and to enact practices to defend 
        their business' sales and supply chains from abuse by 
        sanctions-designated bad actors, many smaller entities and 
        industries, do not.
            (5) According to the U.S. Department of the Treasury's 2021 
        Sanctions Review, ``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 Assistant Secretary for Terrorism and Financial 
        Intelligence noted in a 2022 speech to a private-sector 
        audience at the American Conference Institute, ``We need to 
        redouble efforts--to make sure that these networks do not pass 
        under your radar and around our laws, and that when you obtain 
        information about them, you promptly take action. This is not 
        just a matter of compliance; it is a moral imperative. The 
        choice is between permitting and preventing sanctions evasion--
        there is no space for neutral ground here.''.
            (7) Examples of successful, robust Federal Government 
        public-private sector outreach programs that support the agency 
        mission abound from the law enforcement, Intelligence 
        Community, and regulatory agencies, such as the Federal Bureau 
        of Investigation's InfraGard, the Public-Private Analytic 
        Exchange Program from the Department of Homeland Security and 
        the Office of the Director of National Intelligence, and the 
        Financial Crime Enforcement Network's FinCEN Exchange.
            (8) The FinCEN Exchange, from OFAC's sister agency within 
        the U.S. Department of the Treasury, was mandated on January 1, 
        2021, when Congress enacted the Anti-Money Laundering Act of 
        2020 (AML Act). Section 6103 of the AML Act establishes the 
        FinCEN Exchange to facilitate a voluntary public-private 
        information-sharing partnership between law enforcement 
        agencies, national security agencies, financial institutions, 
        and FinCEN to effectively and efficiently combat money 
        laundering, terrorism financing, organized crime, and other 
        financial crimes, protect the financial system from illicit 
        use, and promote national security.
            (9) The objective of FinCEN Exchange is to develop, 
        deliver, and sustain innovative public-private information 
        sharing in order to enable the private sector to better 
        identify risks and provide FinCEN and law enforcement with 
        critical information to disrupt money laundering, terrorism 
        financing, and other financial crimes. The program goals of the 
        exchange are to:
                    (A) Enhance communication, collaboration, and 
                partnerships among FinCEN, law enforcement, and 
                financial institutions.
                    (B) Support priority national security and counter-
                illicit finance investigations and policies.
                    (C) Enhance the utility of suspicious activity 
                reports and share feedback with the private sector.
                    (D) Encourage, enable, and acknowledge a focus on 
                high-value and high-impact activities.
                    (E) Conduct proactive outreach to allow industry to 
                better prioritize efforts and utilize existing 
                resources.

SEC. 3. OFAC OUTREACH ASSESSMENT.

    (a) GAO Study.--
            (1) Outreach.--The Comptroller General of the United States 
        shall, not later than 360 days after the date of the enactment 
        of this section, carry out a study with respect to the quality 
        and efficacy of outreach activities performed by OFAC in 
        support of the mission of OFAC on or before the date of the 
        enactment of this section.
            (2) Study requirements.--
                    (A) In general.--The Comptroller General of the 
                United States shall, in carrying out paragraph (1), 
                examine each of the following with respect to outreach 
                activities performed by OFAC:
                            (i) Goals and strategy.
                            (ii) Audiences.
                            (iii) Resources.
                            (iv) Number and type of engagements with 
                        private sector entities.
                            (v) Feedback capabilities.
                            (vi) Appropriate privacy and competitive 
                        fairness measures for information received from 
                        or shared with private sector entities.
                            (vii) Compliance with the Federal Advisory 
                        Committee Act, where required.
                            (viii) How information obtained from 
                        outreach activities is used by OFAC to support 
                        the mission of OFAC.
                            (ix) How, if at all, outreach activities 
                        help with enforcement functions.
                    (B) Survey of similar programs.--In carrying out 
                the study required under this subsection, the 
                Comptroller General of the United States shall--
                            (i) examine outreach programs administered 
                        by agencies with similar national security and 
                        regulatory missions, including outreach 
                        programs administered by similar agencies, 
                        including the Financial Crimes Enforcement 
                        Network; and
                            (ii) identify best practices, similarities, 
                        and differences to inform the evaluation of 
                        existing OFAC outreach programs.
    (b) Briefing.--OFAC shall, not later than 60 days after the date on 
which the Comptroller General of the United States submits a study 
pursuant to subsection (a), and after considering the results of such 
study, submit to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs on the Senate a briefing that describes how OFAC will improve 
its outreach activities going forward, including, at the time of such 
briefing, in relation to OFAC outreach activities, how OFAC--
            (1) provides information to those who must comply with OFAC 
        sanctions, especially those in communities and industries that 
        are known to be targeted by bad actors designated by sanctions;
            (2) uses outreach activities to support to the important 
        mission of OFAC, with minimal redirection of staff and 
        resources;
            (3) ensures that the selection of private-sector 
        participants for outreach activities is free from favoritism;
            (4) ensures that private-sector information obtained by 
        OFAC during outreach activities is appropriately safeguarded;
            (5) ensures that information shared at outreach functions 
        can be publicized in a manner that does not competitively 
        disadvantage those not selected to participate in such outreach 
        functions;
            (6) applies Federal requirements with respect to all 
        outreach activities, including Federal Advisory Committee Act 
        requirements;
            (7) ensures that private-sector participants not use 
        outreach activities as an opportunity to pitch products or 
        services or receive advance information about OFAC or 
        Department of the Treasury procurement opportunities; and
            (8) maintains compliance with OFAC ethics requirements.
    (c) Feasibility of Voluntary Exchange Program.--OFAC shall, after 
reviewing the report produced by the Comptroller General of the United 
States pursuant to subsection (a) and submitting the briefing required 
under subsection (b), access the feasibility of the establishment of a 
program by OFAC designed to--
            (1) facilitate a voluntary public-private information 
        sharing partnership among law enforcement agencies, national 
        security agencies, financial institutions, and OFAC to 
        effectively and efficiently administer and enforce economic 
        sanctions against targeted foreign countries and regimes, 
        terrorists, international narcotics traffickers, those engaged 
        in activities related to the proliferation of weapons of mass 
        destruction, and other threats to the national security, 
        foreign policy, or economy of the United States by promoting 
        innovation and technical advances in reporting;
            (2) protect the financial system from illicit use, 
        including evasions of existing economic sanctions programs; and
            (3) facilitate two-way information exchange between OFAC 
        and persons who are required to comply with sanctions 
        administered and enforced by OFAC, including financial 
        institutions, business sectors frequently affected by sanctions 
        programs, and non-government organizations and humanitarian 
        groups impacted by such sanctions programs.
    (d) Pilot Program.--
            (1) In general.--The Secretary of the Treasury may, after 
        considering the results of the study conducted by the 
        Comptroller General of the United States pursuant to subsection 
        (a), the briefing provided by OFAC pursuant to subsection (b), 
        and the feasibility assessment conducted by OFAC pursuant to 
        subsection (c), require OFAC to establish a 3-year pilot of a 
        program designed to--
                    (A) facilitate a voluntary public-private 
                information sharing partnership among law enforcement 
                agencies, national security agencies, financial 
                institutions, and OFAC to effectively and efficiently 
                administer and enforce economic sanctions against 
                targeted foreign countries and regimes, terrorists, 
                international narcotics traffickers, those engaged in 
                activities related to the proliferation of weapons of 
                mass destruction, and other threats to the national 
                security, foreign policy, or economy of the United 
                States by promoting innovation and technical advances 
                in reporting;
                    (B) protect the financial system from illicit use, 
                including evasions of existing economic sanctions 
                programs; and
                    (C) facilitate two-way information exchange between 
                OFAC and persons who are required to comply with 
                sanctions administered and enforced by OFAC, including 
                financial institutions, business sectors frequently 
                affected by sanctions programs, and non-government 
                organizations and humanitarian groups impacted by such 
                sanctions programs.
            (2) Information sharing.--
                    (A) In general.--Any information shared by a 
                private sector entity as a part of any program 
                established under paragraph (1) shall be shared--
                            (i) in compliance with all other applicable 
                        Federal laws and regulations; and
                            (ii) in such a manner as to ensure the 
                        appropriate confidentiality of personal 
                        information.
                    (B) Use of information.--Information received by 
                OFAC from a private sector entity as a part of any 
                program established under paragraph (1) may not be used 
                for any purpose other than identifying and reporting on 
                activities that may involve the compliance with United 
                States sanctions requirements.
                    (C) Rule of construction.--Nothing in this 
                subsection may be construed to create new information 
                sharing authorities or requirements relating to 
                sanctions laws.
            (3) Report.--If a program is established under paragraph 
        (1), OFAC shall, annual submit a report to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        that describes the activities of such program.
    (e) Definitions.--In this Act:
            (1) OFAC.--The term ``OFAC'' means the Office of Foreign 
        Assets Control.
            (2) Private sector.--The term ``private sector entity'' 
        means a business, a nonprofit organization, a nongovernmental 
        organization, a legal and or advisory firm that supports such a 
        business or organization, and a technology provider that 
        supports such a business or organization.
                                 &lt;all&gt;
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