On October 18, 2021, the US Treasury Department published a report of its 2021 Sanctions Review of economic and financial sanctions implemented by the Office of Foreign Assets Control (OFAC) since September 11, 2001. The next day, Deputy Secretary of the Treasury Wally Adeyemo delivered a summary of the report in testimony before the US Senate Committee on Banking, Housing, and Urban Affairs.
The review, which incorporates feedback from public and private stakeholders, together with Adeyemo’s testimony underscores the Treasury Department’s concern that the effectiveness of US sanctions could erode over time as non-US actors seek alternatives to the US financial system, including digital currencies and alternative payment platforms outside of US jurisdiction. The report observes that not only adversaries but also “some allies” are reducing their use of the US dollar in cross-border transactions, implying that unilateral US actions are contributing to the risk that US sanctions could become less effective. To counter this trend, the report lays out a five-point plan to “modernize sanctions” by enhancing the Treasury Department’s policy framework and processes for imposing, enforcing, and revising US sanctions.