Government Shutdown Empties Offices Enforcing Sanctions on Iran

With the government shut down, most U.S. officials enforcing sanctions on Iran are not at work, potentially undermining pressure on Tehran as U.S.-Iran negotiations recommence, according to administration officials, lawmakers, and experts.

The Treasury Department has furloughed approximately 90 percent of the employees in its Office of Terrorist Financing and Intelligence (TFI), which is responsible for the monitoring of illicit activities and enforcement of sanctions related to several countries, including Iran, Syria, and North Korea, Treasury officials told The Daily Beast. The drastic scaling down of personnel working on those activities comes just as the Obama administration is engaging in its first set of diplomatic negotiations with the new Iranian government, led by President Hassan Rouhani.

A subsection of TFI, the Office of Foreign Asset Control (OFAC), which implements the U.S. government’s financial sanctions, has been forced to furlough nearly all its staff due to the lapse in congressional funding, said a Treasury Department spokesman.

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“Given the fact that the vast majority of FinCEN employees have been furloughed, important pieces of financial intelligence will not be sifted through and analyzed by the agency charged with this task,” said Avi Jorisch, a former policy adviser for the Treasury Department’s TFI office. The government is shut down, Jorisch said, but “money launderers are certainly not taking vacation.”

Mark Dubowitz, executive director of the Foundation for the Defense of Democracies, said Iran could capitalize on the lack of monitoring and sanctions enforcement to replenish its coffers and advance its nuclear program while no one is looking.

“If the lights are not on, then the Iranians will engage in massive sanctions busting to try to replenish their dwindling foreign exchange reserves,” he said. “If you don’t have the resources to investigate, identify, and designate the tens of billions of dollars of Iranian regime assets, then you’ve extended the economic runway of the Iranian regime and increased the likelihood that they could reach nuclear breakout sooner rather than later.”

In Congress, top Democrats blame House Republicans for failing to pass a continuing resolution to keep the government running.

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