Office of Foreign Assets Control (OFAC)

TBTF: 2B2F: Too Big to Fail

The Panama Papers: how the world’s rich and famous hide their money offshore

exerpts: from

Caught in the Crosshairs: Developing a  Fourth Amendment Framework for  Financial Warfare

“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.

 

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