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
India evacuates students from Tehran as Israel hits civilian sites
- About 6,000 Indian students are enrolled in Iranian universities
- So far 110 studying in Urmia have left the country through Armenia
NEW DELHI: India’s Foreign Ministry said on Tuesday it was moving Indian students out of Tehran, as many sought safety after their universities were shut down amid ongoing Israeli airstrikes.
Israeli attacks on Iran started on Friday, when Tel Aviv hit more than a dozen sites — including key nuclear facilities, residences of military leaders, and of scientists — claiming they were aimed at preventing Iran from developing nuclear weapons.
Daily attacks have been ongoing for the past five days after Iran retaliated with ballistic missile strikes against Israel.
As the Israeli military intensified its bombing of civilian targets, hitting Iran’s state broadcaster on Monday, stranded foreigners — including 6,000 Indian students — have been struggling to leave.
“Most of the students here were living in apartments, including me and my friend. The first blast in Tehran happened in Sa’adat Abad district, where me and my friend were living,” Hafsa Yaseen, a medical student at Shahid Beheshti University, told Arab News.
“One of our university’s nuclear scientists was martyred in these blasts. Situation is really bad.”
According to the Iranian Ministry of Health and Medical Education, at least 224 people have been killed and 1,481 wounded in Israeli attacks since Friday. Most of the casualties have been reported in Tehran.
India’s Ministry of External Affairs confirmed in a statement that it was moving those studying at universities in the Iranian capital “out of the city for reasons of safety.”
Yaseen was among a group of a few hundred students moved on Monday to Qom, 140 km south of the capital city.
“Me and my friend were frightened, and we just thought it’s our turn now to die. We were literally calling our parents and telling them goodbye,” she said.
“We are not even safe here, because we are still in Iran (and) anything can happen ... We are in constant fear that we might die and our families are more stressed than us. I just want to request the government of India to evacuate us from here as soon as possible.”
A group of 110 Indian students from Urmia University of Medical Sciences in northwestern Iran has already been assisted by the Indian authorities to leave through the land border with Armenia.
“All the Indian students who had crossed the Iran-Armenia border have now safely reached the capital city, Yerevan. This includes around 90 students from Kashmir Valley, along with others from various Indian states,” said Nasir Khuehami, national convenor of the Jammu and Kashmir Students Union.
“Their flight from Armenia to Delhi is scheduled for tomorrow, with all necessary arrangements being facilitated in coordination with the Indian authorities. This comes as an immense relief to the families.”
The families of those remaining in Iran have been pleading with Indian authorities to also bring them home.
“Please save my daughters. My two daughters study (at) Shahid Beheshti University. They are in great panic — the situation in Tehran is so bad that students are in great panic,” one of the mothers, Mubeena Ali, told Arab News through tears.
“They have been shifted to Qom but they feel afraid ... They are greatly distressed. They want to be evacuated.”
Trump mulls extending travel ban to 36 more nations: source
- The Washington Post said it reviewed the internal memo and reported it was signed by Secretary of State Marco Rubio and sent to diplomats who work with the countries
- The ban at first did not include Egypt, although the proposed follow-up list does
WASHINGTON: The United States is considering extending its travel ban to 36 more countries, a person who has seen the memo said Monday, marking a dramatic potential expansion of entry restrictions to nearly 1.5 billion people.
The State Department early this month announced it was barring entry to citizens of 12 nations including Afghanistan, Haiti and Iran and imposing a partial ban on travelers from seven other countries, reviving a divisive measure from President Donald Trump’s first term.
But expanding the travel ban to three dozen more nations, including US partners like Egypt along with other countries in Africa, Asia, the Caribbean and the Pacific, appears to escalate the president’s crackdown on immigration.
The Washington Post said it reviewed the internal memo and reported it was signed by Secretary of State Marco Rubio and sent to diplomats who work with the countries.
A person who has seen the document confirmed its accuracy to AFP.
It reportedly gives the governments of the listed nations 60 days to meet new requirements established by the State Department.
The countries include the most populous in Africa — Nigeria, Ethiopia, Egypt, Democratic Republic of Congo and Tanzania — as well as Cambodia, Kyrgyzstan, Saint Lucia, South Sudan, Syria and Vanuatu.
Should the ban expand to include all countries cited in the memo, nearly one in five people worldwide would live in a country targeted by US travel restrictions.
The 19 countries facing full or partial entry bans to the United States, combined with the 36 cited in the latest memo, account for 1.47 billion people, or roughly 18 percent of the global population.
The State Department declined to confirm the memo, saying it does not comment on internal deliberations.
But it said in a statement that “we are constantly reevaluating policies to ensure the safety of Americans and that foreign nationals follow our laws.”
When the initial ban was announced this month, Trump warned it could be expanded to other countries “as threats emerge around the world.”
The ban at first did not include Egypt, although the proposed follow-up list does.
Trump said the initial measure was spurred by a recent “terrorist attack” on Jews in Colorado.
US officials said that the attack’s suspect Mohamed Sabry Soliman, an Egyptian national according to court documents, was in the country illegally having overstayed a tourist visa, but that he had applied for asylum in September 2022.
Overnight Russian attack on Ukraine kills 15 and injures 156
- At least 14 people were killed as explosions echoed across the Ukrainian capital for almost nine hours
- Russia fired more than 440 drones and 32 missiles, Ukrainian President Volodymyr Zelensky said
KYIV: An overnight Russian missile and drone bombardment of Ukraine killed 15 people and injured 156, local officials said Tuesday, with the main barrage demolishing a nine-story Kyiv apartment building in the deadliest attack on the capital this year.
At least 14 people were killed as explosions echoed across the Ukrainian capital for almost nine hours, Kyiv City Military Administration head Tymur Tkachenko said, destroying dozens of apartments.
Russia fired more than 440 drones and 32 missiles, Ukrainian President Volodymyr Zelensky said, calling the Kyiv attack “one of the most terrifying strikes” on the capital.
Ukraine’s Interior Ministry said 139 people were injured in Kyiv. Mayor Vitalii Klitschko announced that Wednesday would be an official day of mourning.
The attack came after two rounds of direct peace talks failed to make progress on ending the war, now in its fourth year.
Russia steps up aerial attacks
Russia has repeatedly hit civilian areas of Ukraine with missiles and drones. The attacks have killed more than 12,000 Ukrainian civilians, according to the United Nations. Russia says it strikes only military targets.
Russia has in recent months stepped up its aerial attacks. It launched almost 500 drones at Ukraine on June 10 in the biggest overnight drone bombardment of the war. Russia also pounded Kyiv on April 24, killing at least 12 people.
The intensified long-range strikes have coincided with a Russian summer offensive on eastern and northeastern sections of the roughly 1,000-kilometer (620-mile) front line, where Ukraine is short-handed and needs more military support from its Western partners.
Uncertainty about US policy on the war has fueled doubts about how much help Kyiv can count on. Zelensky had been set to meet with US President Donald Trump at a G7 summit in Canada on Tuesday to press him for more help. But Trump returned early to Washington on Monday night because of tensions in the Middle East.
Ukraine tries to keep the world’s attention
Zelensky is seeking to prevent Ukraine from being sidelined in international diplomacy. Trump said earlier this month it might be better to let Ukraine and Russia “fight for a while” before pulling them apart and pursuing peace, but European leaders have urged him to pressure Russian President Vladimir Putin into accepting a ceasefire.
Kremlin spokesman Dmitry Peskov said Tuesday it is unclear when another round of talks might take place.
Ukraine’s Foreign Minister Andrii Sybiha said Russia’s attacks during the G7 summit showed Putin’s “total disrespect” for the US and other countries.
“Russia not only rejects a ceasefire or a leaders’ meeting to find solutions and end the war. It cynically strikes Ukraine’s capital while pretending to seek diplomatic solutions,” Sybiha wrote on social media.
Ukrainian forces have hit back against Russia with their own domestically produced long-range
drones.
The Russian military said it downed 203 Ukrainian drones over 10 Russian regions between Monday evening and Tuesday morning.
Russian civil aviation agency Rosaviatsia reported briefly halting flights overnight in and out of all four Moscow airports, as well as those in the cities of Kaluga, Tambov and Nizhny Novgorod as a precaution.
Overnight Russian drone strikes also struck the southern Ukrainian port city of Odesa, killing one person and injuring 17 others, according to Oleh Kiper, head of the regional administration.
Putin “is doing this simply because he can afford to continue the war. He wants the war to go on. It is troubling when the powerful of this world turn a blind eye to it,” Zelensky said.
Russian attack demolishes apartment building
The Russian attack delivered “direct hits on residential buildings,” the Kyiv City Military Administration said in a statement. “Rockets — from the upper floors to the basement,” it said.
A US citizen died in the attack after suffering shrapnel wounds, Interior Minister Ihor Klymenko told reporters.
Thirty apartments were destroyed in a single residential block after it was struck by a ballistic missile, Klymenko said.
“We have 27 locations that were attacked by the enemy. We currently have over 2,000 people working there, rescuers, police, municipal services and doctors,” he told reporters at the scene of one attack.
Olena Lapyshniak, 49, was shaken from the strike that nearly leveled her apartment building. She heard a whistling sound and then two explosions that blew out her windows and doors.
“It’s horrible, it’s scary, in one moment there is no life,” she said. “There’s no military infrastructure here, nothing here, nothing. It’s horrible when people just die at night.”
People were wounded in the city’s Sviatoshynskyi and Solomianskyi districts. Fires broke out in two other city districts as a result of falling debris from drones shot down by Ukrainian air defenses, the mayor said.
Moscow escalated attacks after Ukraine’s Security Service agency staged an audacious operation targeting warplanes in air bases deep inside Russian territory on June 1.
Spain says April power outage caused by ‘overvoltage’
- Ecological Transition Minister Sara Aagesen said the system “lacked sufficient voltage control capacity” that day
- Authorities have been scrambling to find answers after the April 28 outage
MADRID: A major power outage that struck the Iberian Peninsula in April was caused by “overvoltage” on the grid that led to “a chain reaction,” according to a government report released Tuesday.
The blackout had “multiple” causes, Ecological Transition Minister Sara Aagesen told reporters following a cabinet meeting, adding the system “lacked sufficient voltage control capacity” that day.
Overvoltage is when there is too much electrical voltage in a network, overloading equipment. It can be caused by surges in networks due to oversupply or lightning strikes, or when protective equipment is insufficient or fails.
When faced with overvoltage on networks protective systems shut down parts of the grid, potentially leading to widespread power outages.
Authorities have been scrambling to find answers after the April 28 outage cut Internet and telephone connections, halted trains, shut businesses and plunged cities into darkness across Spain and Portugal as well as briefly affecting southwestern France.
Spanish Prime Minister Pedro Sanchez announced the formation of an inquiry commission led by the Ecological Transition Ministry shortly after the blackout, urging residents not to speculate until detailed results were available.
He had warned that the probe’s conclusions could take several months, given the complexity of the incident.
Aagesen singled out the role of the Spanish grid operator REE and certain energy companies she did not name which disconnected their plants “inappropriately... to protect their installations.”
She also pointed to “insufficient voltage control capacity” on the system that day, due in part to a programming flaw, stressing that Spain’s grid is theoretically robust enough to handle such situations.
Due to these misjudgments “we reached a point of no return with an uncontrollable chain reaction” that could only have been controlled if steps had been taken beforehand to absorb the overvoltage problems, she added.
UK slaps new sanctions on Russia shadow fleet
- Security analysts say the fleet of aging vessels is used by Russia to circumvent international sanctions that ban it from selling oil
- Hundreds of vessels have now been sanctioned by the European Union and the UK
LONDON: The UK on Tuesday tightened its sanctions on Russia’s so-called shadow fleet, slapping bans on 20 more ships and blacklisting 10 other people or bodies involved in energy and shipping.
Security analysts say the fleet of aging vessels is used by Russia to circumvent international sanctions that ban it from selling oil.
Hundreds of vessels have now been sanctioned by the European Union and the UK since Russian President Vladimir Putin ordered the invasion of Ukraine in February 2022.
The UK’s new additions to its assets freeze list include the Orion Star group and Rosneft Marine (UK), both said to be significant to Russia’s energy sector, as well as the deep-sea research unit at the Russian defense ministry.
Although Russia’s economy has not collapsed under the sanctions, officials insist they are having an impact.
“Russia’s economy is slowing and the Kremlin has been forced to make increasingly painful trade-offs to support its war effort,” Downing Street said in a statement.
It claimed the sanctions imposed in the last three years “have deprived Russia of at least $450 billion.”
“By one estimate, that’s equivalent to around two more years of funding for the invasion,” it added.
The UK alone has sanctioned over 2,300 individuals, entities and ships since the start of the
invasion.
UK Prime Minister Keir Starmer said he wanted to hone the new sanctions with Britain’s other G7 partners meeting this week in Canada.
“We should take this moment to increase economic pressure and show President Putin it is in his — and Russia’s interests — to demonstrate he is serious about peace.”
With peace talks stalling, Ukrainian President Volodymyr Zelensky had hoped to press US counterpart Donald Trump to step up sanctions on Russia at the G7 summit.
But as the conflict between Iran and Israel escalated, Trump left the summit early without meeting Zelensky, saying he had “big stuff” to do in Washington. And he has proved reluctant about new sanctions.
The EU has imposed 18 rounds of sanctions on Russia.
Downing Street said “new information” showed Western were creating “significant challenges” for Russian state enterprises, including funding shortfalls, delays in major projects, and growing debt due to high interest rates.
