March 18, 2022
Enforcement of Economic Sanctions: An Overview
As part of the response to Russia’s invasion of Ukraine, the
foreign person is “a political subdivision, agency, or
United States and many other international actors have
instrumentality of the Government of the Russian
imposed economic restrictive measures (“economic
Federation” or has engaged in “activities that undermine the
sanctions”) on individuals and entities financing or
peace, security, political stability, or territorial integrity of
otherwise connected with the Russian and Belarusian
the United States, its allies, or its partners.”
governments. In the United States, the Office of Foreign
Assets Control (OFAC) within the Department of the
Based on intelligence and other information, Treasury
Treasury (Treasury) often leads sanctions implementation.
and/or the State Department identifies specific persons that
OFAC and the Department of Justice (DOJ) serve as the
meet the criteria of these executive orders. These persons
primary enforcers of economic sanctions measures,
are then added to the appropriate list. Persons whose assets
although other federal agencies play a role in enforcement
are blocked and with whom U.S. persons generally may not
efforts. This In Focus provides a brief overview of the
deal appear on the Specially Designated Nationals and
economic sanctions regime and how it is enforced.
Blocked Persons List (SDN List). Persons whose assets are
not blocked, but with whom certain transactions are
Imposition of Economic Sanctions
prohibited, appear on non-SDN lists, collectively arranged
Most economic sanctions are imposed using authority
by OFAC in a Consolidated Sanctions List.
delegated to the President in the International Emergency
Economic Powers Act (IEEPA) and the National
Violations of IEEPA may expose U.S. and foreign persons
Emergencies Act (NEA). The President may, upon
to civil and criminal penalties. Respondents face civil
declaring a national emergency, restrict or prohibit a wide
penalties of up to $250,000 (or $330,947 once adjusted for
range of transactions involving “property in which any
inflation as required by the Federal Civil Penalties Inflation
foreign country or a national thereof has any interest by any
Adjustment Act of 1990) or “an amount that is twice the
person, or with respect to any property, subject to the
amount of the transaction that is the basis of the violation.”
jurisdiction of the United States.” 50 U.S.C. § 1702(a).
50 U.S.C. § 1705; Economic Sanctions Enforcement
“Person” includes natural persons and entities.
Guidelines, 31 C.F.R. App’x A to Pt. 501. They may also
face criminal fines of up to $1 million or up to 20 years’
During periods when the United States “is engaged in
imprisonment for willful violations. 50 U.S.C. § 1705.
armed hostilities or has been attacked by a foreign country
or foreign nationals,” the President’s authority to block and
For further information on IEEPA, see CRS Report
prohibit transactions in designated persons’ property is
R45618, The International Emergency Economic Powers
expanded to include confiscation of property. 50 U.S.C.
Act: Origins, Evolution, and Use. For further information
§ 1702(a)(1)(C). The President may order that the property
on sanctions issued in response to Russia’s invasion of
of any foreign person be confiscated, with title to such
Ukraine, see CRS Insight IN11871, Russia’s Invasion of
property vesting in an agency or person designated by the
Ukraine: New Financial and Trade Sanctions; and CRS
President. The President may also establish the terms on
Report R45415, U.S. Sanctions on Russia.
which the confiscated property may be held or sold, among
other things.
Enforcement of Economic Sanctions
Individuals who violate economic sanctions may face civil
When exercising authorities under IEEPA, the President
or criminal penalties. Enforcement actions may directly
generally issues an executive order that (1) declares a
target sanctions violations, while others may also address
national emergency under the NEA; (2) sets out the legal
other illegal conduct involved in or uncovered while
bases upon which the Secretary of the Treasury or other
investigating the sanctions violations.
officials (e.g., Secretary of the State Department) may
designate specific foreign persons who will be subject to
OFAC
the sanctions; and (3) establishes the types of transactions
If OFAC suspects a person or entity may be acting in
or other prohibitions that shall apply to designated persons.
violation of economic sanctions, it may open enforcement
For example, Executive Order 14024, related to countering
proceedings. Based on evidence considered in its
“harmful foreign activities of the Government of the
investigation, OFAC may issue a finding of no violation; a
Russian Federation,” blocks and prohibits transactions in
request for further information; a cautionary letter; a finding
property within the United States, or in the possession or
of a violation; a finding of a violation with civil monetary
control of a U.S. person, of designated foreign persons. The
penalty; or a criminal referral. Should OFAC have reason to
grounds on which the Secretary of the Treasury, in
believe that the sanctions violation may be ongoing or
consultation with the Secretary of State, may designate
recur, it may also issue a cease-and-desist order. Where
individuals under Executive Order 14024 include that the
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Enforcement of Economic Sanctions: An Overview
relevant, OFAC may also revoke, suspend, modify,
Asset Seizure. The United States’ authority to seize assets
withhold, or deny licenses to engage in certain transactions.
generally derives from civil and criminal forfeiture statutes,
not from sanctions authorities. Criminal forfeiture
If OFAC imposes a monetary penalty, the amount varies
authorities are found in numerous parts of the U.S. Code
depending on the relevant statutory authority (usually
and require a defendant to forfeit “tainted” property—i.e.,
IEEPA) and OFAC’s evaluation of the circumstances. To
property involved in or derived from certain illegal activity.
calculate the penalty, OFAC first determines the “base
As the Supreme Court has stated, these statutes “serve
amount” by considering whether the violation qualifies as
important governmental interests such as ‘separating a
“egregious” and whether the individual voluntarily self-
criminal from his ill-gotten gains,’ [and] ‘returning
disclosed the violation. The egregious or nonegregious
property, in full, to those wrongfully deprived or defrauded
determination is based on a consideration of factors
of it.” Honeycutt v. United States, 137 S. Ct. 1626, 1631
including the violator’s willfulness; harm to the sanctions
(2017). For example, 18 U.S.C. § 982 provides for criminal
program’s objectives; and individual characteristics (e.g.,
forfeiture of real or personal property following a
commercial sophistication). Then OFAC is to consider
defendant’s criminal conviction if that property was
aggravating and mitigating factors, including whether the
involved in or traceable to a variety of offenses, including
violator took remedial action or cooperated with OFAC’s
money laundering; securities fraud; and mail or wire fraud.
investigation to calculate a final penalty.
Civil forfeiture allows the government to bring an action
Should OFAC believe a particular case might warrant
against property, rather than a person, generally on the
criminal penalties, it may refer the case to the DOJ for
theory that the property is suspected of being involved in a
consideration. In such cases, OFAC may impose civil
crime. For instance, 18 U.S.C. § 981 allows the U.S.
penalties in addition to any criminal penalties that an
government to seek civil forfeiture of real or personal
individual may face upon conviction.
property if that property was involved in or traceable to,
U.S. Department of Justice
among other things, money laundering; securities fraud; or
mail or wire fraud. Unlike in criminal cases, the
The DOJ handles criminal violations of sanctions. It also
government need not obtain a criminal conviction against
addresses enforcement through other investigations into
the individual whose property the government seeks to
conduct that may facilitate sanctions violations, such as
seize. Also unlike criminal cases, an “innocent owner” may
money laundering. The DOJ’s National Security Division
contest a civil forfeiture on the grounds that he or she did
leads sanctions violations prosecutions, while other
not know of the illegal conduct giving rise to the forfeiture
prosecutions are led by other offices, including the Money
or that, on learning of the illegal conduct, took all
Laundering and Asset Recovery Section within the
reasonable steps to terminate the property’s involvement in
Criminal Division.
such conduct. 18 U.S.C. § 983.
Sanctions Violations Cases. As with OFAC’s civil-
enforcement authority, the DOJ’s criminal
Although Congress retains significant discretion in crafting
-enforcement
criminal and civil forfeiture provisions, the Constitution’s
authority to address sanctions violations stems from a
Excessive Fines Clause limits the scope of forfeiture laws.
variety of statutes. Because most sanctions are imposed
using IEEPA, the DOJ’s prosecutions
In the criminal context, the forfeiture must not be “grossly
generally rely on
disproportionate to the gravity of a defendant’s offense.”
IEEPA.
United States v. Bajakajian, 524 U.S. 321, 334 (1998). In
the civil context, the Excessive Fines Clause applies only
Sanctions-Related Cases. The DOJ may also seek to
when the relevant statutory provision’s purpose is at least
address conduct enabling sanctions violations through
partly punitive, rather than strictly remedial (e.g., ties
nonsanctions authority. In particular, DOJ may seek to
forfeiture to the commission of certain crimes). Austin v.
prosecute sanctions evasion through investigations into
United States, 509 U.S. 602, 622 (1993).
money laundering or other financial crimes. In connection
with such investigations, DOJ may use its civil and criminal
Other Federal Agencies
forfeiture authorities to seize assets identified as the
In addition to OFAC and the DOJ, a number of federal
proceeds of unlawful conduct. For example, on March 2,
agencies are involved with sanctions enforcement efforts.
2022, Attorney General Merrick Garland announced the
For example, Treasury’s Financial Crimes Enforcement
creation of Task Force KleptoCapture within the DOJ to
Network (FINCen), as part of its duties under the Bank
enforce sanctions, export restrictions, and other economic
Secrecy Act, monitors and provides the DOJ with
countermeasures imposed by the United States in response
to Russia’s
information about suspicious transactions that may reflect
2022 invasion of Ukraine. In addition to
efforts to evade sanctions. In addition, the Bureau of
investigating sanctions violations, the Task Force is to
Industry and Security within the Department of Commerce
investigate efforts to undermine economic sanctions,
oversees export controls for dual-use items—items with
including instances of money laundering and evasion of
“know
both military and civilian uses—and may prohibit the
-your-customer” obligations, and potentially seize
export of these items to individuals or entities on certain
assets identified as the proceeds of unlawful conduct. DOJ
OFAC sanctions lists.
and Treasury are also participating in the multilateral
Russian Elites, Proxies, and Oligarchs (REPO) Task Force
Nina M. Hart, Legislative Attorney
created so countries can “share information to take concrete
actions, including sanctions, asset freezing, civil and
IF12063
criminal asset seizure, and criminal prosecution.”
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Enforcement of Economic Sanctions: An Overview


Disclaimer
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Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
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