WASHINGTON: As Congress considers a controversial nuclear deal with Iran, the US Treasury agency charged with implementing related financial sanctions is at risk of being overwhelmed by its expanding mission, former employees and lawyers who deal with the office say.
The agency, the Office of Foreign Assets Control, is responsible for enforcing a broad array of sanctions and for licensing American companies wishing to do business with sanctioned countries. Both roles will be especially critical if some restrictions are relaxed under the proposed nuclear agreement with Iran.
But a growing reliance on sanctions to address situations as varied as Russia’s incursions into Ukraine, cyberttacks on US businesses, and jihadist financing has increased pressure on the agency, which is being asked to police a bigger beat while staffing and budgets have not kept up.
Dozens of OFAC officials have left the agency in the past four years for better-paying jobs at law offices, consulting firms and banks, which have aggressively built up their compliance departments in response to big fines for sanctions violations.
“OFAC is left in a position where they can only deal with what’s five inches in front of their faces,” said Erich Ferrari, a Washington-based sanctions lawyer.
The agency has prided itself on the firepower of its small and highly specialized staff of about 200, who collectively oversee more than 35 sanctions programs. But the size of the agency has also meant that each departure has an outsized impact, former officials say.
“OFAC is a small organization that is among the leanest, most productive I’ve seen anywhere in government,” said Elizabeth Rosenberg, a former senior adviser at the Treasury Department who left in 2013. “There’s little redundancy.”
The most high-profile recent departures have included Lorraine Lawlor, OFAC’S former chief of compliance programs who left in 2012 for Wells Fargo ; Sean Thornton, former chief counsel who joined French bank BNP Paribas in 2014; Eytan Fisch, former assistant director for policy who left this year for law firm Skadden; and Adam Smith, former senior adviser to the director who left in July for law firm Gibson Dunn.
At least 25 other sanctions compliance officers, lawyers, and others have left OFAC since 2011 for companies including HSBC, Bank of America, Western Union, PayPal, and Credit Suisse, according to a review of LinkedIn profiles.
To be sure, the recruitment of regulators by business is a constant in Washington, and there is no indication that the rate of departures at OFAC is greater than at other agencies. But the impact is particularly acute given that the agency’s staff and budget has grown little in recent years, while its workload has increased.
At one point, OFAC staff were holding up to five happy hours each month for departing colleagues, said David Brummond, a former sanctions adviser who left OFAC in 2014 and is now with law firm DLA Piper.
“It just became funny,” Brummond said. “You had to schedule it into your social calendar.”
Treasury did not provide details on the agency’s staffing levels or comment on whether the agency is short-staffed for the work it does.
“OFAC is comprised of a staff of talented individuals, and our sanctions have become an increasingly effective national security and foreign policy instrument thanks in large measure to the careful work of our staff,” the Treasury said in a statement. BIGGER PAYDAY In some ways the problems faced by OFAC are born of the US government’s success, in winning high-profile penalties against banks for prohibited transactions with Iran, Sudan and other sanctioned countries.
Banks have responded by beefing up compliance departments and tapping senior OFAC officials to lead them. For example, shortly after BNP Paribas agreed to pay US authorities $8.9 billion in 2014 to resolve claims it violated sanctions, it hired Thornton.
Some of the departed officials had served for decades and took with them considerable institutional knowledge of how sanctions have evolved.
OFAC employees, whose salaries top out at around $160,000 per year, can easily double or triple their pay in the private sector. Senior OFAC officials can command up to $1.2 million per year, said a senior compliance official at a large US bank.
Since 2011, the United States has implemented 29 sanctions-related executive orders, according to a Reuters tally, almost double the number from 2006 to 2010 when there were 16 such orders.
OFAC staff have numbered about 170 to 200 for at least the last five years, former officials say. In fiscal 2013, the last year for which information is public, OFAC had a budget of about $31 million, compared to $29 million in 2009, documents show.
Sanctions have also become increasingly complex. The measures imposed on Russia in 2014, sanctions experts say, are especially intricate and target specific activities rather than broad categories of business. And while sanctions ban most US trade with Iran, they include exceptions that allow humanitarian, medical and other business dealings. Such business often relies on the granting of licenses, which lawyers said can take up to a year or more to acquire.
Ferrari said a license he requested for an Iranian animal shelter to raise funds in the United States took 18 months and three separate applications before being granted.
Businesses sometimes give up in frustration after long waits for OFAC’s go-ahead or guidance, lawyers say.
That could present a risk for implementation of the Iran deal, experts say. Without clear and quick guidance, businesses and banks will likely pull back from trade with Iran, even in areas permitted if sanctions are eased. In turn, if Iran did not get the relief it expected from eased sanctions, it would have less incentive to abide by the terms of the deal.
Brummond said it is already a challenge to get agency staff on the phone to give guidance on new sanctions language and what direction regulations might take.
“Clients want the answer whether or not OFAC answers the phone. I try to explain to the client that I’ve left my fourth voice mail,” Brummond said. “I know who I’m calling on the other side, and I know how buried they are.”
US agency overseeing sanctions faces brain drain, added work
US agency overseeing sanctions faces brain drain, added work
South Korea’s former president Yoon Suk Yeol denies insurrection at criminal trial
- Yoon Suk Yeol was formally stripped of office earlier this month
- He became South Korea’s first sitting head of state to be arrested
SEOUL: South Korea’s former president Yoon Suk Yeol denied he had committed insurrection Monday, as the impeached leader appeared in court on the first day of his criminal trial over his martial law declaration.
Yoon was formally stripped of office earlier this month, after being impeached and suspended by lawmakers over his December 3 attempt to subvert civilian rule, which saw armed soldiers deployed to parliament.
He became South Korea’s first sitting head of state to be arrested in January in connection to the criminal case against him, although he was later released on procedural grounds.
Yoon attended the trial at Seoul Central District Court on Monday morning and was asked by the justices to state his name, date of birth and other personal information, according to pool reports.
Yoon is accused of insurrection over his abortive martial law declaration, but his legal team denied all the charges, with the former president then taking to the stand to defend himself.
“To frame an event that lasted only a few hours, was non-violent, and immediately accepted the dissolution request from the National Assembly as insurrection... strikes me as legally unfounded,” Yoon told the court.
Yoon, himself a former prosecutor, asked the court to display the prosecution’s presentation on a courtroom monitor, and proceeded to rebut their opening statement point by point, according to pool reports.
The prosecution argued that Yoon “planned to incite an uprising with the intent to subvert the constitutional order.”
They gave evidence including Yoon’s planning of the martial law in advance and his deployment of the military to the parliament, with orders to break windows and cut the power.
The court will hear witness testimonies from two military officers called by prosecutors, including one officer who claims he was instructed by top commanders “to drag out the lawmakers gathered in the National Assembly to lift the martial law.”
Lawmakers defied armed soldiers and climbed over fences in order to gather in parliament and vote down Yoon’s martial law declaration, forcing him to backtrack in a matter of hours.
Experts say his criminal trial is likely to be a lengthy one.
“The first verdict is likely to be delivered around August, but the case involves around 70,000 pages of evidence and numerous witnesses. So if deemed necessary by the court, the trial may be extended,” lawyer Min Kyoung-sic said.
Former president Park Geun-hye, for example, was impeached in December 2016 — but it wasn’t until January 2021 that the Supreme Court finalized her sentence for influence peddling and corruption.
If found guilty, Yoon would become the third South Korean president to be found guilty of insurrection – after two military leaders in connection to a 1979 coup.
“Legal experts say that the precedent coup could be applied in the current case, as it also involved the coercive deployment of military forces,” said Min.
For charges of insurrection, Yoon could be sentenced to life in prison or the maximum penalty: the death sentence.
But is it highly unlikely that sentence would be carried out. South Korea has had an unofficial moratorium on executions since 1997.
Billionaire tech leaders’ move toward Trump has created a split with workers in Silicon Valley
- Trump has filled a number of his administration’s posts with billionaires and his support from wealthy tech leaders led Democratic President Joe Biden to warn that the US risked becoming an oligarchy ruled by elite
SAN JOSE, California: Like many in the tech industry, Jeremy Lyons used to think of himself as a relatively apolitical guy.
The only time he had participated in a demonstration before now was in the opening days of Donald Trump’s first presidential term, when he joined fellow Google workers walking out of the company’s Silicon Valley campus to protest immigration restrictions. Google’s co-founder and its chief executive officer joined them.
Last weekend was Lyons’ second, also against Trump, but it had a very different feel.
The man directing thousands of marchers with a bullhorn in downtown San Jose on April 5 was another tech worker who would not give his full name for fear of being identified by Trump backers. Marchers were urged not to harass drivers of Tesla vehicles, which have gone from a symbol of Silicon Valley’s environmental futurism to a pro-Trump icon. And no tech executives were anywhere to be seen, only months after several had joined Trump at his January inauguration.
To Lyons, 54, the change says as much about what’s happened to Silicon Valley over the past quarter-century as it does about the atmosphere of fear surrounding many Trump critics nowadays.
“One of the things I’ve seen over that time is a shift from a nerdy utopia to a money first, move fast and break things,” Lyons said.
Political gap seen between tech leaders and their workforce
The tech industry’s political allegiances remain divided. But as some in the upper echelons of Silicon Valley began shifting to the right politically, many of the tech industry’s everyday workers have remained liberal — but also increasingly nervous and disillusioned. Their mood is in stark contrast to the prominent tech leaders who have embraced a conservative populist ideology.
“I think you’re seeing a real gap between the leadership elite here in Silicon Valley and their workforce,” said Ann Skeet, who helps run a center at Santa Clara University studying the ethics of the tech industry.
“The shift hasn’t been for a lot of people,” said Lenny Siegel, a former mayor of Mountain View and longtime liberal activist in the valley. “It’s a handful of people who’ve gotten the attention.”
The biggest example of that is Elon Musk, the world’s richest person and CEO of the world’s best-known electric car company who has taken on a prominent role slashing federal agencies in Trump’s administration. Musk has been joined by several tech billionaires, including investor David Sacks, who helped fundraise for Trump’s campaign and became the White House’s artificial intelligence and cryptocurrency czar, and venture capitalist Marc Andreesen. Google CEO Sundar Pichai and Meta CEO Mark Zuckerberg also attended Trump’s inauguration in Washington.
Zuckerberg began praising Trump after the then-candidate, angered over money Zuckerberg steered toward local election offices in some states in 2020 during the coronavirus pandemic, threatened last summer to imprison him. Zuckerberg also donated $1 million to the president’s inauguration fund and co-hosted an inauguration reception for billionaire Republican donors.
Trump has filled a number of his administration’s posts with billionaires and his support from wealthy tech leaders led Democratic President Joe Biden to warn that the United States risked becoming an oligarchy ruled by elites. During Trump’s first term, the valley and its leaders were a bulwark of resistance to the Republican, especially over immigration, given that the industry draws its workforce from around the globe.
It’s against that backdrop that thousands of people attended the recent rally at a downtown San Jose park to protest the actions of Trump and Musk.
Even as tech industry has changed, Silicon Valley has leaned Democratic
Santa Clara County, which comprises most of Silicon Valley, swung 8 percentage points toward Trump in November election against Democrat Kamala Harris, matching the shift across California. Even with that swing, the county voted 68 percent to 28 percent for the then-vice president and remains a Democratic stronghold.
“We’re still in the belly of the beast,” said Dave Johnson, the new executive director of the Santa Clara GOP, who said the party has gained some new members in the county but few from the tech industry. “If the lake was frozen, there’s a little glimmer on top. I would not say there are cracks in the ice.”
The valley has long leaned Democratic, but with an unusual political mix: a general dislike of getting too involved in Washington’s business coupled with an at-times contradictory mix of libertarian individualism, Bay Area activism and belief in the ability of science to solve the world’s problems.
That has persisted even as the tech industry has changed.
The tech boom was fueled by scrappy startups that catered to their workers’ dreams of changing the world for the better. Google’s motto was “don’t be evil,” a phrase it removed from its code of conduct by 2018, when it and other companies such as Meta, which owns Facebook and Instagram, had grown into multinational behemoths. The companies have had layoffs in recent years, a shock to an industry that not long ago seemed poised for unlimited growth.
Entrepreneurs once dreamed of building startups that would change the world, said Jan English-Lueck, a San Jose State University professor who has been studying Silicon Valley culture for more than 20 years.
“Now,” she said, “if you’re part of a startup, you’re hoping you’ll be absorbed in a way that’s profitable.”
Discontent among some in the tech industry about where it’s headed
Even before some prominent tech leaders shifted toward Trump, there was mounting discontent among some in the industry over its direction. IdaRose Sylvester runs a business promoting a Silicon Valley-style approach to entrepreneurs in other countries.
“I feel sick to my stomach now,” she said.
Sylvester was already disenchanted with the growing inequality in the valley and the environmental cost of all the energy needed to power crypto, AI and data centers. She took part in protests against Trump in 2017, but felt that energy fade once he lost the 2020 election to Biden.
“I saw a lot of people get out of politics once Biden won. There was a feeling it was all OK,” Sylvester said. “It was not all OK.”
It is worse now, she said. She helped organize one of several demonstrations across the valley last weekend during a national day of protests against the new administration.
At first glance, the one in downtown San Jose could have been a typical anti-Trump protest anywhere. A large crowd of largely middle-age and older people carried signs against the president and Musk while chanting against oligarchs.
But it was clearly a Silicon Valley crowd, one still reeling not only from Trump’s challenges to the country’s system of checks and balances but also from the actions of the valley’s top executives.
“The money is all shifting to the wealthiest, and that terrifies me,” said Dianne Wood, who works at a startup. “Unfortunately, you’ve got the Zuckerbergs and Elon Musks of the world who are taking that over.”
“Just coming here, everyone’s saying turn off the facial recognition on your phone,” Wood added. “We’re all scared.”
Kamal Ali, who works in AI, said he felt betrayed by that shift.
“The trust is broken. A lot of employees are very upset by what’s going on,” he said. “It’s going to be different forever.”
Trump says Russian strike on Ukraine ‘a horrible thing’
- “They made a mistake... you’re gonna ask them,” Trump told reporters without specifying who or what he meant
- The Sumy strike came two days after US envoy Witkoff traveled to Russia to meet Putin and push Trump’s efforts to end the war
WASHINGTON: US President Donald Trump on Sunday said a Russian strike on the Ukrainian city of Sumy that killed at least 34 people was “a horrible thing.”
“I think it was terrible. And I was told they made a mistake. But I think it’s a horrible thing. I think the whole war is a horrible thing,” Trump told reporters on board Air Force One while headed back to Washington.
Asked to clarify what he meant by a “mistake,” Trump said that “they made a mistake... you’re gonna ask them” — without specifying who or what he meant.
The American leader’s National Security Council (NSC) had earlier Sunday called the Russian strike “a clear and stark reminder of why President Donald Trump’s efforts to try and end this terrible war comes at a crucial time.”
Neither Trump nor the White House named Moscow as the perpetrator of the attack, though Secretary of State Marco Rubio earlier offered condolences to the “victims of today’s horrifying Russian missile attack on Sumy.”
The Sumy strike came two days after US presidential envoy Steve Witkoff traveled to Russia to meet President Vladimir Putin and push Trump’s efforts to end the war.
Zelensky on Sunday urged the US president to visit his country to better understand the devastation wrought by Russia’s invasion.
“Please, before any kind of decisions, any kind of forms of negotiations, come to see people, civilians, warriors, hospitals, churches, children destroyed or dead,” the Ukrainian leader said in an interview broadcast on US network CBS.
Amnesty urges halt to Ethiopia evictions for urban development
- PM Abiy Ahmed's “corridor project”, which aims to renovate and widen streets, has seen homes, shops, and offices razed in Addis Ababa and at least 58 other cities since its launch in December 2022
ADDIS ABABA: Ethiopia is conducting forced evictions on an “unprecedented” scale, Amnesty International said on Monday, urging authorities to “immediately pause” urban renewal projects.
Prime Minister Abiy Ahmed, in power since 2018, is spearheading a “corridor project” in which streets in the capital and in cities across the country have been renovated and widened.
Launched in December 2022, the project has seen homes, shops, and offices razed in Addis Ababa and at least 58 other cities, leaving parts of the capital resembling a giant building site.
Ethiopian authorities have “failed to adequately consult with affected communities, provided insufficient notice, and none of the people reported receiving compensation,” Amnesty said in their report.
The international NGO urged a pause in evictions and suspension of the project “until a human rights impact assessment is conducted.”
Authorities did not respond to AFP’s requests for comment.
The scale of the evictions is “unprecedented in Ethiopia,” the report said, describing a climate of fear among residents, who are “uncertain if they will be the next to be displaced.”
The NGO interviewed 47 families who were evicted in Addis Ababa between January and February of this year. All requested anonymity, citing security reasons.
Family members told Amnesty that only a week after a public meeting, local officials came to their doors, “asking them to leave their homes within three days and warning them that their homes would be demolished.”
“The 47 respondents stated that their homes were demolished within 24 to 72 hours after officials delivered the door-to-door notice,” Amnesty said, with families forced into rental properties on the city’s outskirts.
“My child is suffering because his school is now too far,” said one parent, saying they were grappling with mental health issues as their social lives had been “ruined.”
“Life has also gotten expensive due to additional transport and house rent costs,” another said.
Two journalists contacted by Amnesty also said they were “victims of harassment” when they attempted to report on the corridor work. They did not provide further details.
International partners “should engage Ethiopian authorities to end forced eviction with no further delay,” Amnesty researcher Haimanot Ashenafi told AFP.
Authorities in Ethiopia, home to some 130 million people, are regularly criticized by global organizations and NGOs for human rights abuses and the repression of dissenting voices.
Indian shrimp industry sails in troubled waters after Trump tariffs
- Farmers are seeing demand dry up amid the uncertainty as exporters have cut offer prices by a tenth since the tariffs
GANAPAVARAM, India/GUAYAQUIL, Ecuador: Turbulence unleashed by President Donald Trump’s tariffs could rock global shipments of shrimp to the United States, with exporters in biggest supplier India saying they endanger 2,000 containers packed with the frozen delicacy.
But Ecuador, thousands of kilometers nearer to the United States faces a lower tariff rate and stands to benefit, the exporters say, as shrimp is its most important export after oil.
India’s shrimp industry is staring at a tariff of 26 percent under Trump’s July plan, which threatens a thriving $7-billion seafood export market heavily reliant on US supermarket chains such as Walmart and Kroger as buyers look to renegotiate rates.
Farmers are seeing demand dry up amid the uncertainty as exporters have cut offer prices by a tenth since the tariffs.
“We are suffering huge losses,” said S.V.L. Pathi Raju, 63, standing by the aquaculture pond where he feeds and grows shrimp in India’s southern coastal state of Andhra Pradesh.
“We don’t know who can resolve our price issues,” added Raju, one of several families in the state’s remote village of Ganapavaram grappling with dwindling sales to exporters.
Many also face high payments for shrimp feed and rentals for the land where the saline ponds have been set up.
“I am not sure how I will sustain prices,” said another farmer, 60-year-old Uppalapati Nagaraju, adding that he had been entirely unaware of the concept of tariffs.
“Had I known, I would not have started my cultivation.”
In the face of erratic demand from exporters, he now regrets having begun shrimp cultivation just 15 days before the tariff news. Although Trump has delayed the 26 percent rate until July, even the current rate of 10 percent has made exporters skittish.
The United States and China are among India’s major markets for seafood exports that touched $7.3 billion last year, on a volume of 1.8 million metric tons that was an all-time high.
Shrimp formed the major component, with the 300,000 farmers of Andhra Pradesh contributing the most to industry supplies, accounting for 92 percent of India’s seafood exports of $2.5 billion last year to its biggest market, the United States.
Industry representatives have joined a state government panel weighing the impact of tariffs and looking for ways to boost exports to other countries, such as China.
But the exporters fear Ecuador’s competitive edge from Trump’s planned lower tariff rate of 10 percent for the South American nation, particularly since it is much closer to the United States, its second biggest market for shrimp.
Yet Ecuadorean producers, with $1.55 billion in shipments in 2024, are less optimistic.
Although US consumers have fueled growth in the area of processed shrimp, Ecuador has yet to attain the capacity to replace India’s production, said Jose Antonio Camposano, president of its National Chamber of Aquaculture.
India “will be obliged to look for other markets where Ecuador is selling, like China and the European Union, so we’ll have more pressure in other markets,” Camposano added.
JOURNEY OF 40 DAYS
Reuters visited one Indian factory where shrimp was washed and machine sorted automatically by size before a manual quality check by workers in masks and gloves. Then a conveyor belt whisked the seafood away to be quick-frozen.
Thousands of tons of frozen shrimp leave Andhra Pradesh each year on a voyage that usually takes 40 days to arrive at ports in New York, Houston and Miami, en route to restaurants and the shelves of retailers such as Safeway and Costco.
The chief of India’s seafood exporters group, G. Pawan Kumar, said he was worried about shipping containers already packed with frozen produce at previously agreed rates now set to be renegotiated by US buyers following the tariffs.
“Ten percent is high, we exporters operate on a 3 percent to 4 percent margin,” said Kumar, president of the Seafood Exporters Association of India, which is pushing the government to win the industry exemptions in trade talks with the United States.
“It’s game over” for the Indian industry if the tariff rate of 26 percent takes effect in July, said one shrimp exporter, who spoke on condition of anonymity.
He was in talks with US clients who did not want to fully absorb the 10 percent tariff, he said, pointing to the risk of earning no profit if he had to sell 130 shipping containers already packed.
In Texas, the seafood section at a Walmart supermarket was piled high with packs of frozen shrimp, among them a “jumbo” variant labelled a product of India and priced at $7.92, under Walmart’s own “Great Value” brand.
“We have built long-lasting and deep relations with suppliers over the years,” said Latriece Watkins, the chief merchandising officer for Walmart in the United States. “We expect that to continue, going forward.”
