US Should Strengthen Sanctions Tools but Be Cautious of Overuse, Treasury Says

The Treasury released its 2020 National Illicit Finance Strategy on Feb. 6, detailing a “roadmap to modernize” its regimes for anti-money laundering regimes countering terrorism financing, the agency said. In the report, Treasury said money launderers and terrorist financers often try to evade U.S. sanctions and export controls on dual-use items, frequently trying to procure controlled U.S.-origin goods and technology.

Treasury said it needs to review and strengthen the tools it uses to stop money laundering and terrorist funding, including “exploring options for strengthening our financial sanctions authorities.” But Treasury also said sanctions must “not become the default response to national security and foreign policy challenges” and are not “simply a public messaging tool.” The agency said “inappropriate use” of sanctions could reduce their impact and lead to more sanctions evasion, and the U.S. should increase cooperation with partner countries to impose multilateral sanctions. “Moving forward, the U.S. government should continue to work to address weaknesses in sanctions implementation and enforcement by foreign governments and the private sector,” Treasury said.

The agency said it should also increase information sharing with industry, including “better communication of risks,” and address barriers to communication. Treasury said more collaboration will lead to better sanctions enforcement. “U.S. law enforcement and Treasury will lead these efforts in 2020,” the report said.