Letter from Washington — From the September 2013 issue

A Very Perfect Instrument

The ferocity and failure of America’s sanctions apparatus

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“Sanctions are the soft edge of hard power,” said Robert McBrien as he put aside the broad-brimmed hat and dark glasses he’d worn to our meeting at a downtown Washington hotel. “They make people suffer. They hurt. They can destroy.”

McBrien may be considered an authority on the subject, given his twenty-four years directing Global Targeting at the Office of Foreign Assets Control, the obscure but immensely potent executor of U.S. sanctions warfare. OFAC is headquartered in the Treasury Annex, a building across from the White House that bears no outward identification save a plaque attesting to its former role as the site of the Freedman’s Bank, which served emancipated slaves. The two hundred professionals in the well-guarded offices almost all carry SCI (Sensitive Compartmented Information) clearances, beyond Top Secret, authorizing them to read decrypted signals intelligence. Most of them are lawyers — increasingly, former federal prosecutors — and they tend to stay in the job.

Cohen has no qualms about acknowledging that his office does more than just enforce sanctions. “We very much see ourselves as involved in the policymaking process,” he told me.

“First they make the policy,” commented a Washington attorney with years of experience of the system. “Then they write the laws. Then they enforce the laws. Imagine if the police did all of that. It would be a scary world.”

Should OFAC’s targeteers (“I hired most of them,” says McBrien) even suspect that you are in some way connected with a violation of a U.S. sanctions program, you may suddenly discover you are an SDN (Specially Designated National). Roughly 5,500 people, organizations, and businesses are listed as such on the OFAC website. SDNs are essentially economic pariahs. Not only are they cut off from any contact with the U.S. financial system, but banks who deal with them are threatened with similar exclusion. Given that almost all international business is carried out in dollars or euros — and that the Europeans are willing partners in our sanctions enforcement — this is a persuasive threat. As a former Obama Administration official told me, “There are businessmen all over the world terrified that they might have had lunch with an SDN.”

“I tend to like sanctions programs that come as a complete surprise,” remarked McBrien, sipping an iced tea. “It’s shock and awe.” Thus, the first you may know of your newfound status is when a U.S. bank declines your ATM card, followed shortly after by a listing on the website for all to see. Finding out precisely why you have been listed can be tough, since OFAC is under no obligation to give anything but a vague explanation to Americans, and none at all to foreigners, nor even to wait for airtight proof that you are engaged in a sanctioned activity.

“This is considered an administrative matter,” explains Erich Ferrari, a Washington lawyer specializing in relief for SDNs. “So all they need is a ‘reason to believe’ you are up to something, which can be based on a press clipping or a blog entry. You start by listing your assets and business activities for them. They send you questions. You reply. And so it goes on,” he said, laughing ruefully, “for a number of years.”

Given a good lawyer and a lot of time, an SDN can get off the list, though with one’s assets frozen there is obviously a problem paying legal bills. OFAC will release money for fees — but it caps them at a rate equivalent to $175 an hour, chump change for the D.C. bar. And while foreign SDNs may have liquid funds, their lawyers risk having their own names added to the roster.

“The same people who put you on the list are the ones who decide whether to take you off,” says Ferrari. “It’s up to them whether to review the case. Often the evidence is classified and they won’t show it to me.” The classified information comes courtesy of OFAC’s access to U.S. intelligence, including the NSA’s ubiquitous communications intercepts. (“When you’ve just talked to a European finance minister,” one former Treasury official told me, “it’s quite useful to read the transcript of the call he then makes to the head of his central bank.”)

Death can bring relief from the list — but not automatically. Osama bin Laden is still there, the multiple spellings of his name meticulously noted. “Just because a party is dead does not mean that they cannot or will not be targeted for U.S. sanctions,” observes Ferrari. “Of course, it’s hard to change their behavior. But without the targeted party alive to contest the designation, no one is going to be overly concerned with that aspect of it.”

is the Washington editor of Harper’s Magazine. He writes frequently on defense and national affairs, and is the author, most recently, of Rumsfeld: His Rise, Fall, and Catastrophic Legacy.

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October 2019