Treasury says it must modernize its economic sanctions

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Updated 39 minutes ago

WASHINGTON (AP) – The Treasury Department says the economic and financial sanctions the United States has used over the past two decades to fight global terrorism, nuclear proliferation, drug cartels and other threats must adapt to a rapidly changing financial world.

The department released a report on Monday saying it needed to modernize the technology it uses and improve its workforce to cope with new tools and techniques, such as digital currencies.

“The Treasury Sanctions Review has shown that this powerful instrument continues to deliver results but also faces new challenges,” Deputy Treasury Secretary Wally Adeyemo said when releasing the report.

The report found that since the terrorist attacks of September 11, 2001, the use of sanctions by the Treasury has increased 933%, from 912 sanctions designations in 2001 to 9,421 this year.

The sanctions program is administered by the Treasury in conjunction with recommendations from the White House and the State Department. The report says it was successful in preventing Iran from using the international financial system and trading markets to generate revenue from oil sales to support its nuclear program, pushing the country to the negotiating table in 2015.

The report also said the sanctions effort froze and seized billions of dollars in assets from shell companies used by the Cali drug cartel, at one point the world’s largest drug trafficking organization. More than 1,600 terrorist entities and individuals have also been sanctioned since the 2001 terrorist attacks, according to the report.

But the review of Treasury sanction operations, which had been ordered by Treasury Secretary Janet Yellen, found that the effort needs to be updated.

The report says sanctions must keep up with new and emerging techniques used by cybercriminals and an evolving financial system where products such as cryptocurrencies have already begun to reduce the use of the US dollar, long the reserve currency. global.

“Technical innovations such as digital currencies, alternative payment platforms and new ways to hide cross-border transactions all potentially reduce the effectiveness of US sanctions,” the report said. “These technologies provide opportunities for malicious actors to hold and transfer funds outside of the traditional dollar-based financial system.”

The report did not provide details on what the Treasury was planning, but last week the United States joined more than 30 countries in pledging to coordinate actions against ransomware attacks through measures such as increasing data sharing between countries and tighter regulations in crypto markets.


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