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May 2, 2019 By: Anna Sayre, Head of Legal Content, ACSS

Regulators at the U.S. Treasury have signalled their top priorities for the year, and it doesn’t look good for sanctions violators. The Treasury’s Office of Terrorism and Financial Intelligence (TFI)’s new budget proposal calls for a substantial increase in funds to both fight terror and enhance sanctions policy enforcement.

As the department that oversees the Office of Foreign Assets Control (OFAC), TFI wields a variety of financial national security tools, from implementing targeted sanctions on individuals and companies to broader punishments on banks for AML compliance deficiencies.

Recently, TFI released its proposed 2020 Budget, which reveals the total amount requested for the year a whopping $167 million. This figure is a sharp increase on the already high 2019 figure of $142 million, which amounted to the highest budget increase to date. In 2017, TFI had a budget of $122 million and, in 2018, a budget of only $109 million.

In addition to this request, the TFI Budget also delineates the programs that will receive a boost from this increase in funds. Among some of the highest requests for funding includes counterterrorism and sanctions programs, such as: the new Terrorist Financing Target Center; National Security Programs – involving virtual Currency, Cybersecurity, Iran, Russia, Human Rights/Corruption, and Counterterrorism; as well asOFAC-wide IT Infrastructure.

Increased Funding For New Terrorist Financing Target Center

TFI has requested an almost $6.3 million increase to its budget and 10 extra employees to fund the Terrorist Financing Target Center, or TFTC. This new office, recently established in May 2017, is the result of collaboration between the U.S. and six “Gulf Cooperation Countries” – Bahrain; Kuwait; Oman; Qatar; Saudia Arabia; United Arab Emirates – to combat global terrorism.

According to the 2020 Budget, the TFTC will “support the Administration’s priorities to fight terrorism in new and innovative ways through a multilateral initiative that will dramatically increase the ability to curb terrorist financing”. Among other things, the Budget claims that the TFTC will “disrupt the finances and operation of terrorist organizations by… coordinating joint disruptive actions, like sanctions”.

National Security and Foreign Policy Goals Named ‘High Priority’

The 2020 Budget also calls for an almost $6.6 million increase and 27 extra employees for its “efforts to apply economic pressure in pursuit of national security and foreign policy goals”. This of course, refers to the many OFAC sanctions programs that exist today.

TFI states that, “as the number of sanctions programs continues to grow, there is a crucial need for increasing intelligence, policy, and targeting staff to identify and take impactful actions against the individuals, entities, and their networks responsible for this dangerous and malign behavior”.

With regard to its request for additional personnel, TFI states that this will specifically address needs within the “high priority areas” of: “Virtual Currency, Cyber, Iran, Russia, Human Rights/Corruption, and Counterterrorism Programs”.Namely:

  • The use of virtual currency in key sanctions programs, such as Russia, Iran, and Venezuela;
  • Countering Iran’s malign behavior and Russia’s destabilizing activities by implementing the Countering America’s Adversaries Through Sanctions Act (CAATSA) targeting and reporting requirements. Continued denial of funding to the Islamic Revolutionary Guard as well as Russian-related sanctions programs are also mentioned as top priorities;
  • Implementation of the Global Magnitsky Act to counter human rights abuses; and
  • Fight terrorist entities across the globe.

As has been the case for a few years now, the 2020 Budget only confirms the Treasury’s continued efforts to focus on creating effective sanctions policy as well as punishing those who seek to circumvent sanctions regulations.

OFAC-wide IT Infrastructure Enhancements

In addition to sanctions policy goals, the TFI 2020 Budget also requests $3.1 million in funding to support OFAC-wide IT Infrastructure. Among the four areas of improvement that TFI mentions, one is most notable: its “Secure Online Communications Tool”.

According to TFI, it has requested funding for a Secure Online Communications Tool so that it can carry out “secure bi-directional, data/e-communication transfers… in order to allow financial institutions to file information required by OFAC regulations (such as blocking reports) in a secure and expeditious manner”. It goes on to say that this will allow financial institutions and other institutions with OFAC requirements to “submit and track respective OFAC transactions, including maintaining an online account with OFAC”.