“Guerrillas in Gray Suits”: The Treasury Department’s Army
The United States relies heavily on sanctions to advance its foreign policy goals.
Office of Foreign Assets Control (OFAC)—“one of the government’s most powerful yet least understood offices.”
OFAC—the small office located within the Treasury Department is responsible for implementing these sanctions—issues sanctions that apply to U.S. citizens located anywhere in the world and all persons and entities within the United States.
Practically, the burden falls on the private sector, namely banks, to enforce sanctions.
When OFAC determines that a person (natural or corporate) is subject to sanctions, financial institutions are then responsible for freezing any assets currently held by this person and prohibiting any future transfers to these people. The penalties for failing to comply are enormous.
Do economic sanctions, which arguably “seize” property without a warrant, violate the Fourth Amendment?
Historically, this issue was not a problem because economic sanctions were targeted entirely against foreign countries—entities that do not enjoy Fourth Amendment protection. In today’s complex financial landscape, however, the issue is not so simple. Many financial transactions involve a party protected, or at least arguably protected, by the Fourth Amendment.