How the government furloughs will actually affect U.S. sanctions and OFAC

The Daily Beast ran an article on Wednesday citing how the government shutdown has vacated the Annex. I’m just going to tick this one off as yet another media piece on the shutdown designed to increase hit factors on the website. While the article is technically accurate (the building is pretty much empty), it offers no substance into how sanctions are actually affected. Overall, life with sanctions will indeed go on. Yes, certain services will be slowed and halted, but if anything OFAC is good at catching up. Instead, I’ve laid out a handy primer on the various services and how the shutdown effects them, all organized by division at OFAC. What is interesting is how much sanctions implementation is a self-contained system. Most sanctions compliance falls on financial institutions which are the front line fight against sanctions. OFAC does not personally oversee the blocking of all wires. It’s mission is to draw up the different sanctions programs, assist others in implementing them (through outreach and licensing specific activities) and level penalties against anyone who fails to comply with the applicable laws. Outside of the scope of providing advice and quickly issuing a license, there is very little that will be effected by a week of shutdown. Will it suck for OFAC members to go back to work with massive backlogs? Absolutely. Will it inihibit our ability to preventing bad people from doing bad things with bad money moved through the U.S. financial system? Doubtful. There are some longer term effects that I do worry about, mainly in the field of morale and retention. Also the fact that while Department of State has plenty of budget left from last year, the fact that OFAC had to furlough practically everyone means that we are looking at an agency that has been asked to do more and more by Congress with less and less. To put it in perspective, it costs about as much to deploy a rifle company to Afghanistan as it does to run OFAC for a year. Yet OFAC is on point for practically every single top national security item this administration is facing. Perhaps this is a signal that the next time Congress asks for more, they should also appropriate more. My other long term worry is about OFAC morale and retention. On the one hand, if you are at the GS-09 level or above but living in a way that loss of a week’s worth of pay is going to put you in debt, you should probably seek financial counseling. On the other hand, and particularly in the compliance branch at OFAC, your pay is already much less than you would make in the private sector and you already put in way more hours than your average federal employee. When your entire office of a little more than a dozen people is in charge of implementing, enforcing and informing about sanctions writ large, it means early days and late departures. To lose 2% of your yearly pay because the guys who hold your money want to act like children makes you start eyeing the private sector even more. Put that on top of issues of promotion and that a bank is offering a pay check three times larger than what you make now, this furlough becomes yet another bizzaro-you sitting on your shoulder telling you to leave.   The Breakdown To catagorize each service to the outside world being effected, I’ve decided to break the analysis down by each division. It’s easier to analyze this way. Also, I will be listing the divisions not by importance...

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