Economic Sanctions: Treasury and State Have Received Increased Resources for Sanctions Implementation but Face Hiring Challenges

The United States has implemented dozens of sanctions programs to counteract activities that threaten U.S. national interests. Sanctions may place restrictions on entire countries, sectors of countries' economies, or specific corporations or individuals. Examples of restrictions include limiting access to the U.S. financial system, freezing assets under U.S. jurisdiction, and restricting trade. The United States has implemented an increasing number of sanctions in recent years, including sanctions on countries that conduct a significant amount of international trade, such as Russia, Venezuela, and Iran.

GAO was asked to examine the resources U.S. agencies have devoted to sanctions implementation. This report examines (1) agencies' roles in sanctions implementation, (2) resources available to agency units that focus primarily on sanctions implementation, (3) the extent to which agency units that focus primarily on sanctions implementation have assessed their resource needs, and (4) agencies' reporting to Congress on sanctions implementation expenses and activities. GAO gathered data from 13 agencies and their sub-units to identify their roles and the personnel they used for sanctions implementation. GAO also reviewed agency reporting, planning, and budget documents and interviewed agency officials.

Agencies may have one or more roles in sanctions implementation—for example, developing policy and investigating, enforcing, and prosecuting violations. The Departments of the Treasury, State, and Commerce each have a unit focused primarily on sanctions—Treasury's Office of Foreign Assets Control (OFAC), State's Office of Economic Sanctions Policy and Implementation (SPI), and Commerce's Bureau of Industry and Security's (BIS) Foreign Policy Division (FPD). GAO identified 10 other agencies with roles in sanctions implementation.

OFAC, SPI, and FPD generally received steady or growing resources in recent years, but OFAC and SPI face hiring challenges. In fiscal years 2014 to 2019, OFAC received a 58 percent budget increase and additional hiring authority, but vacancies ranged from 6 to 26 percent of its authorized full time equivalents (FTEs). OFAC attributed its hiring challenges to competition from other agencies and the private sector and the time needed for security clearances. State SPI received authority to hire six additional FTEs in fiscal year 2020, for a total of 21, but more than half of its authorized positions were vacant at the start of the fiscal year. FPD lacks funding to fill one of its 10 authorized positions.

OFAC, SPI, and FPD all consider resource needs as part of annual budget processes, and OFAC has an ongoing process to assess its workforce needs. OFAC began its workforce planning process in fiscal year 2019 and expects to make preliminary recommendations in March 2020. According to SPI officials, SPI cited the increasing use of sanctions across multiple regions in justifying its request for additional fiscal year 2020 positions. BIS prepared a 2016 plan that assessed its workforce, including FPD, but stated that it no longer uses the plan.

Agencies provide information on selected sanctions expenses and activities in mandated reports. Treasury's reports on 25 sanctions programs include expenses for Treasury, State, and other agencies if relevant executive orders identify them. State reported activities for a weapons of mass destruction sanctions program but also reported no specific expenditures for the program. State reviewed program information to prepare the reports, but the reports do not describe what it considered, limiting information available to Congress.

GAO recommends that State include additional information about the expenditures it considers in its reporting for the Proliferation of Weapons of Mass Destruction sanctions program. State concurred with the recommendation.

The United States implements dozens of economic sanctions programs to  counteract activities that threaten U.S. national interests. The number of  U.S. sanctions programs has increased in recent years, as the United  States has applied sanctions to serve a range of foreign policy goals.  Sanctions may place restrictions on a country’s entire economy, on  targeted sectors of its economy, or on individuals or corporate entities for  reasons such as the target’s support for narcotics trafficking, weapons  proliferation, human rights abuses, or terrorism. The increasing number of  sanctions actions has led to concerns about whether U.S. agencies have  sufficient resources to implement the sanctions.

You asked us to review issues related to the resources that agencies  have devoted to sanctions implementation. This report examines (1)  agencies’ roles in sanctions implementation, (2) the resources available  to agency units that focus primarily on sanctions implementation, (3) the  extent to which agency units that focus primarily on sanctions  implementation have assessed their resource needs, and (4) agencies’  reporting to Congress on sanctions implementation expenses and  activities.

To examine agencies’ roles in sanctions implementation, we first  identified agencies involved in sanctions implementation by reviewing  sanctions authorities, including statutes and executive orders, agency  documents and websites, and interviewing agency officials. We then  used these interviews and documents to summarize agencies’ principal  roles in sanctions implementation, and we vetted this summary with the  Departments of the Treasury (Treasury), State (State), and Commerce  (Commerce), which we had previously identified as having units that  focus primarily on sanctions implementation. We prepared a data  collection instrument to obtain information on agency roles and resources  for sanctions implementation from agencies across the government,  pretested this instrument with several agency units, and made  adjustments based on their feedback. We then sent the data collection  instrument to all agencies or agency units that we had identified as having  a role in sanctions implementation, requesting information about the  specific actions these agencies perform for each role as well as  information on the number of staff devoted to sanctions implementation  as of fiscal year 2019.

To examine the resources available to agency units that focus primarily  on sanctions implementation, we reviewed congressional budget  justifications and obtained and analyzed data on funding for sanctions- focused units at Treasury, State, and Commerce for fiscal years 2014  through 2019 and on personnel within these units as of the beginning of  fiscal years 2014 through 2020. We determined that these data were  sufficiently reliable for reporting on trends in funding, authorized full-time  equivalents (FTE), and filled positions in these agency units.

To examine the extent to which agency units that focus primarily on  sanctions implementation have assessed their resource needs, we  interviewed agency officials and reviewed their written responses to our  questions to identify their budget development process and any relevant  workforce analyses and plans. We reviewed agency performance reports  and annual reports and interviewed agency officials representing  Treasury, State, and Commerce units that focus primarily on sanctions  implementation to identify any additional information that can measure  changes in agency workload over time. We then reviewed that  information and interviewed agency officials to assess how accurately it  reflected each agency’s sanctions workload. We also reviewed  documentation of Treasury’s ongoing workforce planning process to  assess whether the process, if completed according to plan, would  address principles of strategic workforce planning.

To examine agencies’ reporting to Congress on sanctions implementation  expenses and activities, we reviewed background information to identify  mandated reports that included information on sanctions implementation  expenses and activities. We asked officials of Treasury’s Office of Foreign  Assets Control (OFAC) to confirm the list of mandated reports that include  sanctions expenses and activities. We also reviewed sanctions legislation  to identify the specific requirements for these mandated reports. We then  asked agency officials to provide copies of the most recently submitted  mandated reports as of January 2019, and we analyzed the agencies and  types of expenses the reports included.

We conducted this performance audit from October 2018 to March 2020  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Sanctions are imposed pursuant to statute, executive order, or other  authorities. For example, the President may use authorities granted in the  International Emergency Economic Powers Act (IEEPA) and the National  Emergencies Act (NEA) to issue executive orders authorizing sanctions.  The United Nations Participation Act of 1945 provides the basis for the  U.S.’s implementation of United Nations Security Council sanctions  mandated under Article 41 of the United Nations Charter. Sanctions  provide a range of tools that Congress and the President may use to  attempt to alter or deter the behavior of a foreign government, an  individual, or an entity in furtherance of U.S. national security or foreign  policy objectives. For example, sanctions may be imposed in response to  human rights abuses, weapons proliferation, or occupation of a foreign  country. Sanctions may include actions such as limiting trade; blocking  assets and interests in assets subject to U.S. jurisdiction; limiting access  to the U.S. financial system, including limiting or prohibiting transactions  involving U.S. individuals and businesses; restricting private and  government loans, investments, insurance, and underwriting; and denying  foreign assistance and government procurement contracts.

The United States imposes comprehensive sanctions and targeted  sanctions.

Comprehensive sanctions generally include broad-based trade  restrictions and prohibit commercial activity with an entire country.  Examples of comprehensive sanctions include U.S. sanctions against  Iran and Cuba.

Targeted sanctions restrict transactions of, and with, specific persons or  entities. For example, the U.S. sanctions program related to Somalia  targets persons engaging in acts threatening the peace, security, or  stability of that country.

Sectoral sanctions are a form of targeted sanctions directed at a  specified sector, or sectors, of a target’s economy. For instance,  Executive Order 13662 authorized sanctions targeting persons  operating in certain sectors of the Russian economy as might later be  determined by the Secretary of the Treasury in consultation with the  Secretary of State, such as the financial services, energy, mining, and  defense and related materiel sectors.

Supplementary sanctions, also known as secondary sanctions, target  third-party actors doing business with, supporting, or facilitating  targeted regimes, persons, and organizations. For example, in  February 2017, Treasury imposed sanctions against 13 individuals  and 12 entities for their involvement in, or support for, Iran’s ballistic  missile program as well as for acting for or on behalf of, or providing  support to, Iran’s Islamic Revolutionary Guard Corps–Qods Force.

OFAC’s implementation of sanctions includes publishing the Specially  Designated Nationals and Blocked Persons List of individuals, groups,  and entities whose assets in the United States are blocked and with  whom U.S. persons are prohibited from dealing. The addition of an  individual, group, or entity to this list is referred to as a sanctions  designation.

Agencies may issue licenses to authorize transactions with sanctioned  entities that otherwise would be prohibited by existing sanctions.  According to OFAC, many of its licensing determinations are guided by  U.S. foreign policy and national security concerns. In making these  determinations, OFAC must often coordinate with State and other  government agencies, such as Commerce. OFAC issues two types of  licenses: (1) general licenses, which authorize a particular type of  transaction for a class of persons without the need to apply for a specific  license, and (2) specific licenses, which OFAC issues to a particular  person or entity to authorize a particular transaction. Commerce’s Bureau  of Industry and Security (BIS) issues two forms of authorization: (1) an  individual validated license requiring an application and (2) a license  exception allowing an export or reexport, under stated conditions, for  which no application is required.

Agency Roles and Selected Mandated Resource and Activity Reporting

Laws and executive orders establishing sanctions may designate agency  implementation roles. Some sanctions-related executive orders designate  both primary and consultative agencies. For example, Executive Order  13818 establishes sanctions that include blocking the U.S. assets of  persons whom the Secretary of the Treasury, in consultation with the  Secretary of State and the Attorney General, determines to be  responsible for, or complicit in, serious human rights abuse, among other  measures. Executive orders may also broadly direct U.S. government  agencies to take appropriate measures within their authorities to perform  specified functions and duties. When roles are not assigned by the law or  executive order authorizing the sanctions, agency roles are typically  assigned through an interagency process.

The IEEPA and the NEA mandate that the President report to Congress  when using authorities granted under those laws. The IEEPA requires  the President to report, among other things, actions taken in the exercise  of IEEPA authorities to Congress at least once during each succeeding 6- month period following the administration’s initial reporting of the  authorities’ use. The NEA requires the President to transmit a report to  Congress within 90 days after the end of each 6-month period following a  declaration of a national emergency, providing the total U.S. government  expenditures that are directly attributable to the exercise of powers and  authorities conferred by declaration of the emergency. The President  has delegated responsibility for many of these reports to the Secretary of  the Treasury. However, the President delegated responsibility for the  report on the National Emergency With Respect to Proliferation of  Weapons of Mass Destruction, Executive Order 12938, to the Secretary  of State.

The Foreign Narcotics Kingpin Designation Act (Kingpin Act), enacted in  1999, mandates that the President prepare classified reports by July 1 of  each year that include the number of new Kingpin Act designations and  the personnel and resources directed toward the imposition of Kingpin  sanctions.

The Trade Sanctions Reform and Export Enhancement Act of 2000  (TSRA) mandates that the applicable department or agency submit  quarterly and biennial reports on activity under the act regarding the  department or agency’s determinations and processing of license  applications for export of agricultural commodities, medicines, and  medical devices to specified entities and destinations, including state  sponsors of terrorism. OFAC and Commerce’s BIS submit reports in  response to the TSRA.

To implement sanctions, agencies need to identify the human resources  needed for the work. Strategic workforce planning focuses on developing  long-term strategies for acquiring, developing, and retaining an  organization’s total workforce to meet the needs of the future. Agency  approaches to such planning can vary with each agency’s particular  needs and mission. We have previously identified five principles that a  strategic workforce planning process should address:  1)  Involve top management, employees, and other stakeholders.  2)  Determine the critical skills and competencies that will be needed.  3)  Develop strategies that are tailored to address gaps in number,  deployment, and alignment of human capital approaches.  4)  Build the capability needed to address administrative, educational,  and other requirements important to support workforce strategies.  5)  Monitor and evaluate progress toward human capital goals and  the contribution that human capital results have made toward  achieving programmatic goals.

Treasury, State, and Commerce Have Units with Roles in Sanctions Implementation

Treasury, State and Commerce have units dedicated primarily to  sanctions implementation and also have units with roles in sanctions  implementation in addition to other responsibilities. Other agencies,  including the Departments of Defense, Energy, Homeland Security, and  Justice and federal financial regulatory agencies, play specific roles in  sanctions implementation based on their expertise or broader duties.

Agencies May Have One or More Roles in Sanctions Implementation

Agencies’ roles in sanctions implementation may be assigned to them in  legislation, by executive order, in presidential memorandums, or through  the interagency process. Table 1 shows the roles that agencies may have  in sanctions implementation and examples of agency actions associated  with each role.

Treasury, State, and Commerce Have Units Dedicated Primarily to Sanctions Implementation

Treasury, State, and Commerce each have units that focus primarily on  sanctions implementation and that act in all five of the roles we identified.

Treasury. Treasury’s OFAC, part of the department’s Office of  Terrorism and Financial Intelligence (TFI), administers and enforces  economic sanctions based on U.S. foreign policy and national security  through consultation with the Secretary of State. OFAC acts under  presidential national emergency powers, as well as authority granted  by specific legislation, to impose controls on transactions and freeze  assets under U.S. jurisdiction. OFAC consists of four offices:

The Office of Sanctions Policy and Implementation leads OFAC’s  design, implementation, and evaluation of sanctions programs and  develops OFAC’s public guidance, licenses, and regulations.

The Office of Compliance and Enforcement works to promote  compliance with OFAC’s sanctions programs and investigates  apparent violations.

The Office of Global Targeting works with other units within TFI,  other U.S. agencies, and foreign partners to identify and  investigate targets for sanctions designation.

The Office of Sanctions Support and Operations supports all  sanctions-related functions at OFAC, including human capital and  budgetary functions.

State. State’s Office of Economic Sanctions Policy and  Implementation (SPI)—housed in the Bureau of Economic and  Business Affairs, Division for Counter Threat Finance and  Sanctions—is responsible for providing foreign policy guidance for the  vast majority of sanctions programs and obtaining international  cooperation with U.S. agencies enforcing sanctions. According to SPI,  it acts as State’s central coordinating office for 25 of the 30 sanctions  programs that were active as of April 2019. SPI also implements  sanctions under authorities delegated to the Secretary of State,  including sanctions on Iran and Syria.

Commerce. In Commerce’s BIS, the Foreign Policy Division (FPD) of  the Office of Nonproliferation and Treaty Compliance is one of the  components that implements sanctions through U.S. export controls.  The division is responsible for developing, analyzing, evaluating, and  coordinating export controls related to sanctions policy.

In addition to having units that primarily focus on sanctions, Treasury,  State, and Commerce have units that carry out roles in sanctions  implementation in addition to other responsibilities.

Treasury. Treasury has several other units that support sanctions  implementation. For example, in TFI, the Office of Intelligence and  Analysis examines classified and unclassified reporting, financial  transactions, and open-source databases for evidence of sanctions  violations. The Financial Crimes Enforcement Network monitors and  analyzes financial information on threats, producing intelligence  reports that may identify targets for designation and sanctions  violators. In addition to TFI units, the Internal Revenue Service, the  Office of International Affairs, and the Office of the General Counsel  also have roles in sanctions implementation. For example, the Office  of International Affairs helps to assess the likely impact of sanctions  and conducts outreach to foreign counterparts regarding sanctions  implementation.

State. Units at State have sanctions implementation roles related to  their expertise. Some of these units take actions in all five of the  sanctions roles shown in table 1 and are responsible for specific  sanctions authorities within State, according to State officials. For  example, the Bureau of International Narcotics and Law Enforcement  Affairs is responsible for coordinating and communicating State’s  position on existing or proposed new sanctions in relation to the  Kingpin Act and transnational criminal organizations. According to  State officials, the Bureau of Counterterrorism and Countering Violent  Extremism leads State in designating Specially Designated Global  Terrorists under Executive Order 13224 and Foreign Terrorist  Organizations under Section 219 of the Immigration and Nationality  Act. The Bureau of Economic and Business Affairs’ Office of Threat  Finance Countermeasures has a primary role in implementing  sanctions under Executive Order 13224, which targets terrorist  financiers and others who provide material support to terrorists.

Commerce. Commerce has several other units that support sanctions  implementation. For example, the Office of Export Enforcement  provides input regarding sanctions proposals and feedback regarding  any adverse impact to existing investigations. The Office of National  Security and Technology Transfer Controls implements primarily  sectoral sanctions by providing technical analyses of items and  recommendations during sanctions development. The Office of  Exporter Services provides a range of resources, including electronic  resources and educational seminars, which provide exporters with  guidance on export compliance processes and procedures.

Table 2 provides an overview of the various roles that Treasury, State,  and Commerce units play in sanctions implementation. See appendix II  for additional details.

Other Agencies Have Roles in Sanctions Implementation in Addition to Other Responsibilities

Several other agencies have more-specific roles in sanctions  implementation, with the extent of their involvement dependent largely on  their area of expertise. These agencies carry out their sanctions-related  roles in addition to other responsibilities.

Department of Defense. The Office of the Under Secretary of  Defense for Policy contributes to sanctions implementation,  participating in all roles except targeting. The office coordinates  department units’ reviews of sanctions proposals, provides the  department’s recommendation to interagency partners during  sanctions development, and represents the department during  interagency discussions regarding sanctions enforcement.

Department of Energy. The National Nuclear Security Administration  supports sanctions by providing technical analyses of weapons of  mass destruction and conventional arms transactions that may be  subject to sanctions and by providing recommendations during  sanctions development. The National Nuclear Security Administration  also reviews export licenses for munitions and items with both military  and commercial applications, known as dual-use items, which may  include parties subject to sanctions.

Department of Homeland Security. Units of the Department of  Homeland Security also have varied roles in sanctions  implementation. For example, the Human Rights Violators and War  Crimes Unit in U.S. Immigration and Customs Enforcement’s  Homeland Security Investigations includes a Global Magnitsky  investigative support team, which targets serious human rights  abusers and corrupt foreign officials through OFAC sanctions and visa  denials. Units in U.S. Customs and Border Protection maintain a list  of sanctioned countries and couriers for which shipment applications  are rejected and use an automated targeting system to identify high- risk shipments and coordinate appropriate enforcement actions.

Department of Justice. Multiple Department of Justice units  contribute to sanctions implementation, participating in all roles except  licensing. For example, the National Security Division works with law  enforcement partners to facilitate the investigation and prosecution of  sanctions violators.

Financial regulatory agencies. Financial regulatory agencies with  roles in sanctions implementation may review the compliance  programs of the institutions they oversee with respect to OFAC  requirements. Some of these agencies can also enforce penalties  for significant deficiencies in institutions’ OFAC compliance programs.  Financial regulatory agencies generally examine institutions’  compliance with OFAC policies concurrently with examinations for  compliance with the Bank Secrecy Act (BSA) and anti–money  laundering (AML) statutes.

Table 3 provides an overview of the various roles of these agencies in  sanctions implementation. Also see appendix II for additional details of  agency units’ sanctions implementation roles. See appendix III for  information about agency units’ number of personnel with sanctions  implementation responsibilities.

Sanctions Implementation Units at Treasury, State, and Commerce Have Received Steady or Increasing Resources but Faced Challenges in Filling Some Positions

All three of the sanctions implementation units we reviewed have  generally received steady or increasing resources since fiscal year 2015  but have faced challenges in filling some positions. OFAC has received  increasing inflation-adjusted budgetary and authorized human resources  each fiscal year since 2015 but has consistently experienced a gap  between the number of authorized and actual full-time equivalents  (FTEs). OFAC officials attributed the gap to challenges in hiring due to  competition from other agencies and the private sector and the time  needed for new hires to obtain security clearances. State SPI has also  generally received additional authorized inflation-adjusted budgetary and  human resources but has not been fully staffed in recent years.  Commerce’s FPD has received relatively steady inflation-adjusted  budgetary resources but, according to Commerce officials, lacks funding  to fill one of its 10 positions.

Treasury’s OFAC Received Increasing Resources in Fiscal Years 2015-2019 but Faces Hiring Challenges

OFAC received increasing budgetary resources in each of the last 5 fiscal  years. In inflation-adjusted terms, OFAC’s budgetary resources increased  by a total of 58 percent, from approximately $29.7 million in fiscal year  2014 to approximately $46.8 million in fiscal year 2019. (See fig. 1.)

OFAC has also received authority to hire additional FTEs since fiscal year  2014, yet a number of the additional authorized positions have remained  unfilled. According to OFAC officials, OFAC allocated most of its  additional authorized FTEs to the Office of Global Targeting, which is  responsible for conducting investigations of sanctions targets. At the start  of fiscal year 2014, 10 of OFAC’s 173 authorized positions (6 percent)  were unfilled. By the start of fiscal year 2020, 55 of OFAC’s 259  authorized positions (21 percent) were unfilled. In the intervening period,  the gap between authorized and actual FTEs at the start of each fiscal  year ranged from 34 to 58 positions (14 to 26 percent of authorized  FTEs). (See fig. 2.)

Despite the increase in authorized FTEs, OFAC has faced challenges in  filling the additional positions. At the start of fiscal year 2020, 21 percent  of OFAC’s authorized sanctions investigator positions (13 of 62) were not  filled. Also unfilled were nine of 25 OFAC sanctions licensing officer  positions, three of 18 enforcement officer positions, two of 15 sanctions  policy analyst positions, and six of 14 sanctions compliance officer  positions. Officials of both OFAC and Treasury’s Office of the Assistant  Secretary for Management cited three primary challenges in hiring  candidates with the necessary qualifications:

Competition with other agencies, including those in the intelligence community, which can use direct-hire authority to expedite the hiring process

Competition with the private sector, which offers higher salaries The time required for security clearance processing, which delays hiring for positions, such as sanctions investigators, who need a special sensitive investigation that must be adjudicated at the top secret/sensitive compartmented information levelTreasury does not currently have direct-hire authority for OFAC but can  use other authorities to address hiring challenges. OFAC can use TFI’s  agency-specific schedule A authority, which excepts up to 100 positions  at TFI from competitive selection requirements; schedule A authority is  not specific to OFAC. In August 2019, officials of Treasury’s Office of the  Assistant Secretary for Management stated that the office was not  seeking direct-hire authority through the Office of Personnel  Management. Additionally, the officials noted that Treasury has used  flexibilities such as veterans’ hiring preferences to fill positions. However,  in December 2019, Treasury officials stated that they had determined to  seek direct-hire authority and would support the passage of legislation  providing such authority.

State’s Office of Economic Sanctions Policy and Implementation Received an Overall Increase in Resources in Fiscal Years 2014-2019, but More Than Half of Its Positions Are Vacant

SPI received annual budgetary resource increases in fiscal years 2015  through 2018, before a slight decline in fiscal year 2019. In inflation- adjusted terms, SPI budgetary resources increased overall by 42 percent,  from $2.3 million in fiscal year 2014 to $3.2 million in fiscal year 2019.  (See fig. 3.)

SPI has received authority to hire six additional FTEs for fiscal year 2020,  but more than half of its authorized positions were vacant at the start of  the year. SPI’s authorized FTEs ranged from 13 to 16 in fiscal years  2014 to 2019 and increased to 21 FTEs for fiscal year 2020. At the start  of each fiscal year from 2014 to 2019, SPI had one to three fewer actual  FTEs than authorized. However, the increase in authorized FTEs for  fiscal year 2020 followed a decline in the number of filled positions during  fiscal year 2019, when SPI lost more than a third of its staff. As a result,  as of the beginning of fiscal year 2020, more than half of SPI’s 21  authorized FTEs were unfilled. (See fig. 4.) According to SPI officials, the  departures during fiscal year 2019 were for the most part unscheduled  and resulted from staff promotions, moves to elsewhere in State, or  resignations to accept positions in other agencies or the private sector.  SPI officials added that a department-wide backlog in hiring constrained  SPI’s ability to fill these gaps and that the office would have to pay for the  additional six FTEs without an increased budget. As of December 2019,  State was recruiting to fill some of these positions, according to SPI  officials. SPI expected one staff member to start in early January, had  extended an offer to another, and was advertising to fill four additional  positions.

While SPI has generally received increased budgetary resources and  authorized FTEs in recent years, State discontinued the Office of the  Coordinator for Sanctions Policy, formerly housed in the Office of the  Secretary. The office was responsible for, among other things,  coordinating sanctions strategies, integrating sanctions into foreign policy  plans, and analyzing the effects of sanctions. According to data that State  provided, the office had an authorized staff of seven FTEs at the start of  each fiscal year from 2014 through 2018, with the exception of fiscal year  2016, when eight FTEs were authorized. State also reported that the  office had one to four unfilled positions at the start of each fiscal year  during this period.

Commerce’s FPD Has Received Relatively Constant Resources since Fiscal Year 2015

FPD received an overall increase in budgetary resources from fiscal year  2014 to fiscal year 2019, but most of the increase occurred from fiscal  year 2014 to fiscal year 2015. Overall, FPD’s budgetary resources  increased by 28 percent, adjusted for inflation, from fiscal year 2014 to  fiscal year 2019. However, after a 24 percent increase in fiscal year 2015,  resources remained steady through fiscal year 2019 at approximately  $1.4 million per year, adjusted for inflation. (See fig. 5.)

FPD has had the same number of authorized FTEs since fiscal year  2014, maintaining an authorized level of 10 FTEs from fiscal year 2014 to  fiscal year 2020. FPD generally had one fewer actual FTE than  authorized as of the beginning of each fiscal year. (See fig. 6). At the  beginning of fiscal year 2020, according to Commerce officials, the  Foreign Policy Division lacked funding to advertise and hire for the vacant  position. According to Commerce officials, FPD receives a funding  amount for personnel and the funding they have received is sufficient for  nine FTEs.

Agencies Assess Resource Needs through the Annual Budget Process and OFAC Has Begun Workforce Planning, but All Agencies Face Challenges in Determining Needs

Officials at sanctions-focused units at Treasury, State, and Commerce all  described their use of the annual budget process to assess their resource  needs, and Treasury and Commerce have undertaken broader planning  efforts. Treasury’s OFAC has begun an internal workforce planning  process that, if implemented as described, would satisfy principles for  strategic workforce planning that we have previously identified. According  to State SPI officials, SPI assesses its resources in the annual budget  formulation process and has been able to add temporary positions in  response to workforce needs. Commerce BIS officials stated that they  shift resources in response to needs, and BIS has previously prepared a  budget strategy that included its office primarily responsible for sanctions  implementation. Treasury, State, and Commerce all face challenges in  measuring changes in their sanctions workload over time.

Treasury OFAC Assesses Resources through Budget Development and Has an Additional Ongoing Workforce Planning Effort

Treasury’s OFAC reviews and requests resources as part of the annual  TFI budget development process, which considers OFAC’s requests  along with those of other TFI components. According to OFAC officials,  OFAC submits its funding and resource needs to TFI for consideration.  The OFAC budget justification for TFI includes the number of positions  requested for all OFAC components as well as a description of each  request. According to OFAC, once TFI has considered all of its  component submissions, TFI submits its budget request to the Assistant  Secretary for Management, who considers it as part of Treasury’s larger  budget request. OFAC also stated that it has also used quarterly  meetings and discussions as part of Treasury’s quarterly performance  reviews to review resource needs and challenges.

In addition to undertaking reviews as part of the budget process, OFAC  launched a workforce planning effort in fiscal year 2019 and stated that it  would be led by OFAC’s Office of Sanctions Support and Operations. As  part of this effort, the Office of Sanctions Support and Operations stated  that it plans to use Treasury’s department-wide workforce planning model  and tools to gather information from OFAC’s component offices as a  basis for, among other things, analyzing risks to OFAC’s mission,  identifying resource gaps, and developing an action plan to address them.  OFAC further stated that it plans to use its ongoing workforce planning  model to assess the effectiveness of its current hiring authorities. In  October 2019, OFAC officials stated that they expected to submit  preliminary recommendations for each OFAC component to OFAC  leadership by the end of December 2019. However, OFAC officials later  stated that, because of the departure of the Assistant Director of  Management Programs—the OFAC senior leader responsible for  implementing the workforce planning initiative—on October 1, 2019, the  planned date to submit preliminary recommendations to OFAC leadership  was rescheduled to March 31, 2020.

We analyzed the model and tools that OFAC is using for its ongoing  resource analysis, to determine whether the process they set out would  address five principles for strategic workforce planning that we had  previously identified. We concluded that, if it were implemented as  OFAC documents describe, the process would satisfy these principles.  For example, the process calls for involving management and employees  during its development and implementation and calls on managers to  consider critical skills and competencies in their workforce analysis.

State SPI Assesses Workforce Needs through the Budget Process and Has Filled Positions on a Temporary Basis

State SPI requests resources as part of its annual budget process. State  does not request a separate budget for SPI but instead combines SPI  with the Office of Threat Finance Countermeasures (TFC) in its annual  budget request. According to SPI officials, State sends the combined  request for TFC and SPI to the Office of Management and Budget (OMB)  every year, although the resources obtained may not reflect SPI’s original  request. For example, SPI officials stated that SPI requested a greater  increase in authorized positions for fiscal year 2020 than it ultimately  received.

SPI officials described ways that they assess staff workloads and seek to  add or adjust resources on a continual basis. According to SPI officials,  they have worked to fill positions on a temporary basis in response to  rising needs. For example, SPI was authorized to add three temporary  positions to cover the additional workload from Iran and Venezuela  sanctions in early 2019. According to SPI officials, in justifying the request  for additional temporary positions, SPI noted a significant increase in  officer workload during the reimposition of sanctions against Iran, as well  as maximum-pressure campaigns against Iran and Venezuela and  increased activity related to existing and new sanctions authorities. As of  October 2019, State planned to convert the three positions to permanent  positions. Similarly, SPI officials stated that SPI justified its request for an  increase in positions for fiscal year 2020 by noting an increasing use of  sanctions as part of U.S. maximum economic pressure campaigns across  multiple regions.

Agency approaches to workforce planning can vary depending on each  agency’s particular needs and mission. For subunits such as SPI, using  the budget process, identifying changing priorities, and responding  flexibly to those changes can address workforce planning needs. SPI  officials further stated that SPI expects to review its workforce needs and  structure if new executive orders delegate additional sanctions authorities  to the Secretary of State.

Commerce Assesses Needs through the Budget Process and Shifts Personnel in Response to Demands

Commerce BIS units such as FPD assess and communicate their  resource needs as part of the annual budget formulation process,  according to BIS officials. BIS officials described budget formulation at  Commerce as a “bottom-up” process, with BIS units providing information  that is folded into Commerce’s overall budget. During this process, BIS  budget office staff meet with program staff, review budget guidance  provided by OMB as well as BIS’s own guidance, and ask program  officials to identify any new initiatives or any new requirements for  resources. According to BIS officials, each program office prepares a  summary description of the request and needed resources for approval  by the Assistant and Deputy Assistant Secretary for that office, the  Deputy Under Secretary, and ultimately the BIS Under Secretary.  According to BIS officials, BIS’s budget office then requests additional  information about the approved activities. BIS’s Budget Office in turn  submits the materials to the Commerce Departmental Budget Officer,  who takes into account any known OMB and congressional viewpoints  and department priorities. According to BIS officials, because of  competing priorities, BIS funding priorities are not always carried over into  the department’s overall request. BIS officials noted that, absent  additional resources, they have some flexibility to shift personnel within  the bureau to address periods of increased sanctions-related demand.  For smaller units such as FPD, using the budget process, identifying  changing priorities, and responding flexibly to those changes can address  their workforce planning needs.

Commerce previously prepared a multiyear budget strategy that  assessed workforce needs throughout BIS, including FPD. In 2016, a  contractor that Commerce hired prepared a Five-Year Budget Strategy  Plan, which included workforce planning and projections. As part of the  assessment, the plan analyzed BIS license volume and estimated the  amount of time that staff in the BIS Export Administration’s Office of  Nonproliferation and Treaty Compliance (which includes FPD) spent on  particular tasks, such as conducting license application reviews, making  license determinations, and developing regulations related to sanctioned  countries. The plan projected future BIS license volume, external factors  that would affect BIS workload, and the future FTEs that BIS would need  to perform its mission. The plan examined the workload projection and  the effect of attrition and concluded that FPD would need 0.5 additional  FTEs by 2020 and 1.25 additional FTEs by 2022. BIS officials stated that  they initially used the budget strategy plan to help with budgeting.  However, according to the officials, the plan and its assumptions quickly  became obsolete and they did not use it in subsequent years. In addition,  BIS officials stated that the plan did not recognize BIS’s ability to shift  resources or request appropriations as needed.

Agencies Face Challenges in Measuring Workload to Assess Resource Needs

Treasury, State, and Commerce units that focus primarily on sanctions  implementation have information that can measure changes in agency  workload over time; however, agency officials cited challenges in using  this information as accurate measures of workload for the purpose of  informing resource needs. For example, counting the number of individual  actions taken to implement sanctions (e.g., designations, licenses, or the  imposition of a penalty) does not capture the actions’ varying complexity  or the time spent on developing potential actions that are ultimately not  taken. Agency officials noted that, in general, the drivers of their  workloads are global events and U.S. foreign policy priorities that may  lead to more or less sanctions activity. Table 4 shows (1) selected  information that can be used to measure changes in agency workload  over time and (2) the potential weaknesses of these measures.

Agencies Provide Information on Sanctions Activities and Expenses in Selected Mandated Reports

OFAC and State each prepare and submit reports in response to the  requirements of the IEEPA and the NEA. Both OFAC and State report  sanctions implementation actions in response to the requirements of the  IEEPA. OFAC’s NEA-mandated reports generally include information on  expenditures reported by Treasury and State and by any other agencies  identified in the relevant executive order. However, according to State’s  most recent NEA reports, no specific State expenditures were directly  attributable to the exercise of authorities conferred by the declaration of a  national emergency under the NEA during the reporting period. In  previous reviews, we and Treasury’s Office of Inspector General have  found weaknesses in the consistency and timeliness of OFAC reports  mandated by the Kingpin Act and the TSRA, respectively.

OFAC’s Mandated NEA Reports Include Expenses for Agencies with Roles in Sanctions Implementation, while State’s Have Reported No Expenditures

Both OFAC and State include information on actions taken to implement  sanctions programs in response to the requirements of the IEEPA.  OFAC’s reports on sanctions programs under the IEEPA include data on  the number of designations and the type of entity designated, the number  of licensing actions, and the number and value of blocked transactions for  sanctions programs authorized by the IEEPA. State’s IEEPA-mandated  report for a weapons of mass destruction sanctions program (Executive  Order 12938), prepared by State’s Bureau of International Security and  Nonproliferation (ISN), summarizes the actions State has taken to  address nonproliferation through bilateral and multilateral channels,  including actions taken against Russia, North Korea, Syria, and the  reimposition of nuclear-related sanctions on entities in Iran. Both OFAC  and State included the reports responding to IEEPA requirements as part  of the same document submitted in response to the NEA report  requirements.

OFAC’s reports on sanctions programs under the NEA include a  summary total of expenditures reported by various agencies to implement  those programs, as well as a listing of the agencies whose expenditures  are included in the reports. The reports state that the expenditures  included are predominantly personnel wage and salary costs. OFAC  contacts multiple agencies to compile estimates of total expenditures for  its NEA reports. According to OFAC officials, OFAC contacts an agency  about its expenditures if the relevant executive orders have delegated  sanctions implementation authority to the agency or tasked it with certain  duties. Using a standardized request message, OFAC asks such  agencies to estimate their expenditures for the national emergency by, for  example, estimating the hours spent by staff members on activities  related to the emergency and multiplying that number by appropriate  hourly compensation rates. OFAC stated that it always asks State to  provide estimated expenditure information and contacts other agencies to  seek their expenditures on a program-by-program basis.

OFAC’s NEA reports include Treasury and other agencies. All 25 of the  NEA reports from mid- to late 2018 that we reviewed included Treasury  expenditures, which were in many cases limited to OFAC and the  Treasury Office of General Counsel. All but one report included State  expenditures. Three reports included Commerce expenditures, five  included Department of Homeland Security expenditures, and 12 included  Department of Justice expenditures. While the reports did not include  other agencies’ expenditures, some of the reports explicitly acknowledged  that they did not reflect certain operating costs incurred by the intelligence  and law enforcement communities.

State ISN’s May 2019 NEA-mandated report for Executive Order 12938  stated that there were no specific expenditures directly attributable to the  exercise of authorities conferred by the declaration of a national  emergency under the NEA during the 6-month reporting period. The prior  two reports also stated that there were no specific expenditures directly  attributable to the sanctions program. The reports included no other  information about the program expenditures.

In response to our requests, State officials provided additional information  about the NEA reporting of expenditures. According to the officials, State  reported no expenditures for implementation activities for Executive Order  12938 because those activities have been subsumed into expenditures  for normal, daily work—similar to overhead expenses. Expenditures for  the implementation activities are mixed with, and indivisible from, the  ongoing programming activities of the relevant offices and agencies.  State officials indicated that State would report an amount other than zero  if funds were reprogrammed, additional staff were required, or staff  engaged in activities in addition to daily, normal work to implement the  executive order. State officials also told us that they consulted State’s  Bureau of Arms Control, Verification and Compliance, regional bureaus,  and offices in the Departments of Commerce, Defense, and Energy in  preparing the report.

However, State’s reports have not included any of these additional  statements about the information that State considered in concluding  there were no specific expenditures attributable to the sanctions program.  Standards for Internal Control in the Federal Government states that  management should externally communicate the necessary quality  information to achieve the entity’s objectives so that external parties can  help the entity achieve its objectives and address related risks. Because  State’s reports do not include the additional information that State  considered, Congress lacks complete information regarding sanctions  implementation expenditures.

Prior Studies Have Noted Limitations in Other Required OFAC Sanctions Reporting

Kingpin Act Reports Do Not Provide Consistent Expenditure Data

We have previously found that agencies do not report expenditures in  response to OFAC’s Kingpin Act data requests in a consistent fashion.  The Kingpin Act mandates that the President prepare a classified report  to the Permanent Select Committee on Intelligence of the House of  Representatives and the Select Committee on Intelligence of the Senate  by July 1 of each year that, among other things, includes the status of  sanctions imposed under the Kingpin Act and the personnel and  resources directed to the imposition of Kingpin sanctions. OFAC  compiles and submits these reports. OFAC’s Kingpin reports include  previous year and cumulative data on the number of asset-blocking  actions and Kingpin designations. The reports also include Treasury,  State, DOD, and Justice expenditures, which the reports indicate are  mostly personnel salary costs. However, we recently found that the  agencies did not use consistent methods, across agencies and time, in  providing their expenditures to OFAC for Kingpin Act program activities.  We recommended that the Secretary of the Treasury (1) ensure that  OFAC provide its partner agencies more specific guidance regarding  Kingpin Act–related expenditure data to improve the consistency of data  submitted by these agencies and (2) disclose information about  limitations in the consistency and reliability of the agency expenditure  data in its annual reports to Congress.

Treasury’s Inspector General Has Recommended OFAC Improve Timeliness of TSRA- Mandated Reports

Treasury OFAC and Commerce BIS each submit reports to Congress  mandated by the TSRA. Treasury’s Inspector General found that OFAC  had not submitted its reports in a timely fashion and recommended OFAC  take steps to improve the timeliness of its submissions.

OFAC. OFAC’s TSRA-mandated reports include information about its determinations regarding applications for licenses as well as the time it spent processing the applications. In April 2018, Treasury’s Office of Inspector General found that OFAC had not issued these reports in a timely manner and recommended that OFAC provide guidance to ensure that future TSRA-mandated reports are timely. According to the Treasury Office of Inspector General, Treasury’s actions in response—bringing its submission of the TSRA-mandated reports up to date and revising its TSRA report procedures—satisfied the intent of the office’s recommendation, but the Inspector General would continue to follow up. However, OFAC’s submission of the TSRA- mandated reports has continued to lag. OFAC released the TSRA- mandated reports for the second, third, and fourth quarters of fiscal year 2018 (i.e., January through September 2018) in November 2019; released the report for the first quarter of fiscal year 2019 in December 2019; and released the report for the second quarter of fiscal year 2019 in February 2020. OFAC’s most recent biennial report, for October 2014 through September 2016, was issued in August 2019.

BIS. BIS’s TSRA-mandated reports include information about the licensing actions taken by BIS in relation to exports of agricultural commodities to Cuba, as well as processing times for those actions. BIS submitted its most recent report on January 17, 2020, covering the period from October 1 to December 31, 2019. BIS’s most recent biennial report, for October 2016 through September 2018, was issued in November 2018.

The United States has increasingly relied on sanctions as a means to  achieve important foreign policy goals. Implementing these sanctions  involves multiple government agencies, some of which have multiple units  with roles in sanctions implementation. Key agencies that implement  sanctions have generally received steady or growing resources in recent  years, but Treasury and State have staffing gaps and face challenges in  securing the staff needed to fill their authorized positions. Treasury OFAC  has an ongoing effort to assess its workforce needs, and Treasury, State,  and Commerce all assess workforce needs through the budget process.

The IEEPA and NEA each include requirements for reports to Congress  that Congress can use to review the activities and expenditures that have  been used for implementing these sanctions. However, State’s reports for  Executive Order 12938 have not explained the information that State  considered in reporting no expenditures. As a result, Congress does not  have complete information about the data that State considers in  calculating its sanctions implementation resources, which Congress could  use to inform its review of agency resource requests.

The Secretary of State should direct the Assistant Secretary for  International Security and Nonproliferation to include additional  information about the expenditures it considers in its NEA-mandated  reporting for Executive Order 12938.

We provided a draft of this report to the Departments of Commerce,  Defense, Energy, Homeland Security, Justice, State, and the Treasury,  as well as the Commodity Futures Trading Commission, Federal Deposit  Insurance Corporation, Federal Reserve System, Internal Revenue  Service, National Credit Union Administration, Office of the Comptroller of  the Currency, and Securities and Exchange Commission for review and  comment. State provided official comments, which are reproduced in  appendix IV. State concurred with our recommendation and indicated that  it will provide additional clarity on its procedures in future NEA-mandated  reporting for Executive Order 12938. The Departments of Commerce,  Homeland Security, Justice, State, and the Treasury, as well as the  Internal Revenue Service, Office of the Comptroller of the Currency, and  Securities and Exchange Commission also provided technical comments,  which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees and to the Secretaries of Commerce, Defense, Energy,  Homeland Security, Justice, State, and the Treasury, as well as the  Chairman and Chief Executive of the Commodity Futures Trading  Commission, Chairman of the Federal Deposit Insurance Corporation,  Chair of the Board of Governors of the Federal Reserve System,  Commissioner of the Internal Revenue Service, Chairman of the National  Credit Union Administration, the Comptroller of the Currency, and the  Chairman of the Securities and Exchange Commission. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-8612, or GianopoulosK@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine (1) agencies’ roles in sanctions  implementation, (2) the resources available to agency units that focus  primarily on sanctions implementation, (3) the extent to which agency  units that primarily focus on sanctions implementation have assessed  their resource needs, and (4) agencies’ reporting to Congress on  sanctions implementation expenses and activities.

To examine agencies’ roles in sanctions implementation, we identified  agencies involved in sanctions implementation by reviewing sanctions  authorities, including statutes and executive orders, and agency  documents and websites and interviewing agency officials. We used  these documents and interviews to summarize agencies’ principal roles in  sanctions implementation, and we vetted this summary with the  Departments of the Treasury (Treasury), State (State), and Commerce  (Commerce), which we had identified through our initial interviews and  review of background materials as having units that focus primarily on  sanctions implementation. We then prepared a data collection instrument  to obtain information on sanctions implementation from agencies across  the government. Using this instrument, we requested information about  the specific actions these agencies performed for each of the roles we  identified, the number of staff they devoted to sanctions implementation,  and the estimated percentage of time these staff spent on sanctions  implementation in fiscal year 2019. We also requested information about  the sources and methods that agencies or agency units used to produce  these estimates. We pretested the instrument with the Office of the  Comptroller of the Currency and the Department of Homeland Security’s  U.S. Customs and Border Protection and made changes based on the  results of the pretest before sending the instrument to all agencies or  agency units that we had identified as having a role in sanctions  implementation. To estimate in full-time equivalents (FTE) the staff  resources that agencies devoted to sanctions implementation, we  multiplied agencies’ estimates of the number of staff devoted to sanctions  implementation by the agencies’ estimates of the percentage of time  those staff spent on sanctions-related duties.

To examine the resources available to agency units that focus primarily  on sanctions implementation, we reviewed congressional budget  justifications and used a data collection instrument to obtain information  on (1) funding for units that focused primarily on sanctions  implementation at Treasury, State, and Commerce in fiscal years 2014  through 2019 and (2) personnel in these units as of the beginning of fiscal  years 2014 through 2020. We compared the information that agencies  provided with data in their congressional budget justifications and  determined that these data were sufficiently reliable for reporting on  trends in funding, authorized FTEs, and filled positions at these agency  units. We then examined challenges associated with hiring for, and filling,  positions at these agency units by interviewing agency officials and  reviewing agencies’ responses to our written questions.

To examine the extent to which agency units that primarily focus on  sanctions implementation have assessed their resource needs, we  interviewed agency officials and reviewed their written responses to our  questions about their budget development processes and any relevant  workforce analyses and plans they had prepared. We reviewed  documentation of Treasury’s ongoing workforce planning process against  criteria for strategic workforce planning that we had previously identified,  to assess whether the process, if completed according to plan, would  address principles of strategic workforce planning that we had previously  identified. We reviewed agency performance reports and annual reports  and interviewed agency officials representing Treasury, State, and  Commerce units that focus primarily on sanctions implementation, to  identify any additional information the agencies had that could measure  changes in agency workload over time. We then reviewed that  information and interviewed agency officials to assess how accurately the  measures reflected each agency’s sanctions workload.

To examine agency reporting to Congress on sanctions implementation  expenses and activities, we reviewed background information on  sanctions implementation to identify mandated reports that included  information on sanctions expenses and activities. We confirmed our list of  the mandated reports that included sanctions expenses and activities with  Treasury’s Office of Foreign Assets Control. We also reviewed sanctions  legislation such as the International Emergency Economic Powers Act,  the National Emergencies Act, the Foreign Narcotics Kingpin  Designation Act and the Trade Sanctions Reform and Export  Enhancement Act of 2000 to identify the specific requirements for those  mandated reports on agency expenses and activities. We then requested  from agency officials copies of the agencies’ most recently submitted  mandated reports as of January 2019 and analyzed the agencies and  types of expenses the reports identified. We requested information from  agency officials and reviewed supporting documentation in order to  describe how agencies estimated their expenses for sanctions  implementation.

We conducted this performance audit from October 2018 to March 2020  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Agency Roles in Sanctions Implementation

To determine agencies’ roles in sanctions implementation, we sent a data  collection instrument to all agency units that we had identified as having a  role in sanctions implementation, requesting information on the specific  actions the agency units perform for each role. Tables 5 through 12  summarize the information provided in the agency units’ responses to the  data collection instrument.

Appendix III: Agency Personnel with Sanctions Implementation Duties

We identified units of 13 agencies that have a role in sanctions  implementation, and we requested that each unit report the number of  personnel with sanctions-related duties and the estimated percentage of  time these personnel spent on such duties in fiscal year 2019. The  agency units used various methods to generate their estimates. Several  of the units were unable to estimate numbers of personnel with sanctions- related duties or the percentage of time these personnel spent on  sanctions-related duties. In many cases, agency units were unable to  disaggregate the relatively minimal resources devoted to sanctions  implementation from the resources for wider duties related to their  mission. The following provides information about each agency or agency  unit.

Department of State (State). All nine units that State identified as having a role in sanctions implementation were able to estimate the number of personnel with sanctions implementation duties in fiscal year 2019. The units used sources such as position descriptions and management surveys of staff to generate the estimates.

Department of the Treasury (Treasury). Of the seven Treasury units from which we received information, five were able to estimate the number of personnel with sanctions implementation duties in fiscal year 2019. Officials of the sixth unit stated that they could not provide such an estimate. The seventh unit, the Office of Intelligence and Analysis of the Office of Terrorism and Financial Intelligence (TFI), provided an estimate of the percentage of time its analytic staff devoted to sanctions but, because of sensitivity concerns, did not provide estimates of the number of personnel with sanctions implementation duties.

Department of Commerce (Commerce). Of the six Commerce units from which we received information, five were able to estimate the number of personnel with sanctions implementation duties in fiscal year 2019. However, Export Enforcement, a much larger BIS unit with over 170 employees, was not able to disaggregate the time its personnel spent on sanctions implementation from its broader export control enforcement activities. According to Export Enforcement officials, its investigative management system does not record whether its activities respond to potential violations of Office of Foreign Assets Control (OFAC) sanctions or violations of the Export Administration Regulations. Many of the cases that the office investigates include potential violations of both sanctions and the regulations.

Department of Defense. The Department of Defense’s Office of the Under Secretary of Defense for Policy, which includes the Defense Technology Security Administration, was able to estimate the number of personnel with sanctions implementation duties. To generate the estimates, the office used sources including position descriptions and management judgement of time spent by individual action officers on sanctions.

Department of Energy. The Department of Energy’s National Nuclear Security Administration relied on management judgment to estimate the number of personnel with sanctions duties.

Department of Homeland Security. At the Department of Homeland Security, units in U.S. Immigration and Customs Enforcement were able to estimate the number of personnel with sanctions implementation duties in fiscal year 2019 by analyzing their investigative case management database. However, other department units were unable to provide such estimates. For example, Coast Guard officials reported that it would be difficult to estimate the number of personnel with sanctions implementation duties because these personnel are located throughout the United States and the world and do not record the time they spend on sanctions.

Department of Justice. At the Department of Justice, the National Security Division and most sections of the Criminal Division were able to estimate the number of personnel with sanctions implementation duties in fiscal year 2019. However, other department units were unable to provide such estimates. For example, Drug Enforcement Administration (DEA) officials stated that it is difficult to quantify the time that DEA’s special agents dedicate specifically to sanctions. According to agency officials, investigations and operations to secure evidence for indictments can also be used to support sanctions designations. As a result, according to DEA, the agents spend minimal time on sanctions implementation that they would not have spent on their work in any case. The Federal Bureau of Investigation noted the same justification for why the bureau was unable to provide estimates of the number of personnel with sanctions-related duties.

Financial regulatory agencies. The six financial regulatory agencies identified as having a role in sanctions implementation were unable to estimate numbers of personnel with sanctions implementation duties. Financial regulators were generally unable to disaggregate the time that personnel spent on OFAC compliance examinations because these are often performed concurrently with broader Bank Secrecy Act/Anti–Money Laundering examinations.

See table 13 for additional information about each agency unit.

Appendix IV: Comments from the Department of State

Appendix V: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Drew Lindsey (Assistant  Director), Michael Simon (Analyst-in-Charge), Neil Doherty, Justin Fisher,  Reid Lowe, Grace Lui, Christina Pineda, Julia Robertson, and Paul Sturm  made key contributions to this report.

The United States has increasingly used sanctions—such as freezing assets under U.S. control—to counteract threats to U.S. interests.

We reviewed federal agencies’ roles in, and the resources they devote to, carrying out sanctions. Key agencies have generally received steady or growing funding. However, Treasury and State Department sanctions units have had difficulty filling positions. Treasury attributes its hiring challenges to competition and the time required for security clearances.

State reported activities but did not report specific expenditures for one sanctions program. We recommended it provide additional information to Congress.