United States sanctions

United States sanctions are financial and trade restrictions imposed against individuals, entities, and jurisdictions whose actions contradict U.S. foreign policy or national security goals. Financial sanctions are primarily administered by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), while export controls are primarily administered by the U.S. Department of Commerce's Bureau of Industry and Security (BIS).

Restrictions against sanctioned targets vary in severity depending on the justification behind the sanction, and the legal authorities behind the sanctions action. Comprehensive sanctions are currently in place targeting Cuba, Iran, North Korea, Russia, Syria, and certain conflict regions of Ukraine, which heavily restrict nearly all trade and financial transactions between U.S. persons and those regions. Targeted sanctions specifically target certain individuals or entities that engage in activities that are contrary to U.S. foreign policy or national security goals, rather than an entire country. The U.S. also implements "secondary sanctions", which risk a sanctions designation against a non-U.S. person who transacts with sanctioned parties in violation of U.S. sanctions law, even if no U.S.-nexus existed for the transaction.

The United States has imposed two-thirds of the world's sanctions since the 1990s. Numerous American unilateral sanctions against various countries around the world have been criticized by different commentators.

History

After the failure of the Embargo Act of 1807, the federal government of the United States took little interest in imposing embargoes and economic sanctions against foreign countries until the 20th century. United States trade policy was entirely a matter of economic policy. After World War I, interest revived. President Woodrow Wilson promoted such sanctions as a method for the League of Nations to enforce peace. However, he failed to bring the United States into the League and the US did not join the 1935 League sanctions against Italy.

Trends in whether the United States has unilaterally or multilaterally imposed sanctions have changed over time. During the Cold War, the United States led unilateral sanctions against Cuba, China, and North Korea. Following the disintegration of the Soviet Union and the end of the Cold War, United States sanctions became increasingly multilateral. During the 1990s, the United States imposed sanctions against countries it viewed as rogue states (such as Zimbabwe, Yugoslavia, and Iraq) in conjunction with multilateral institutions such as the United Nations or the World Trade Organization. According to communications studies academic Stuart Davis and political scientist Immanuel Ness, in the 2000s, and with increasing frequency in the 2010s, the United States acted less multilaterally as it imposed sanctions against perceived geopolitical competitors (such as Russia or China) or countries that, according to Davis and Ness, were the site of "proxy conflicts" (such as Yemen and Syria).

During the COVID-19 pandemic, the United Nations High Commissioner for Human Rights Michelle Bachelet and some members of the United States Congress asked the United States to suspend its sanctions regimes as way to help alleviate the pandemic's impact on the people of sanctioned countries. Members of Congress who argued for the suspension of sanctions included Bernie Sanders, Alexandria Ocasio-Cortez, and Ilhan Omar.

The United States applies sanctions more frequently than any other country or nation, and does so by a wide-margin. According to American Studies academic Manu Karuka, the United States has imposed two-thirds of the world's sanctions since the 1990s.

Types of sanctions imposed by the United States

• bans on arms-related exports,
• controls over dual-use technology exports,
• restrictions on economic assistance
• financial restrictions such as:
  • authority to prohibit U.S. citizens from engaging in financial transactions with the individuals, entities, or governments on the list, except by license from the U.S. government
  • requiring the United States to oppose loans by the World Bank and other international financial institutions,
  • diplomatic immunity waived, to allow families of terrorism victims to file for civil damages in U.S. courts,
  • tax credits for companies and individuals denied, for income earned in listed countries,
  • duty-free goods exemption suspended for imports from those countries, and
  • prohibition of U.S. Defense Department contracts above $100,000 with companies controlled by countries on the list.
• visa restrictions that prevent certain individuals from entering the U.S.

Targeted parties

The U.S. does not maintain a specific list of countries that U.S. persons cannot do business with because its sanctions program varies in scope depending on the sanctions program. Although some sanctions programs are broad and target entire jurisdictions ("comprehensively sanctioned jurisdictions"), most are "targeted" sanctions and focus on specific entities, individuals, or economic sectors. Depending on the nature of the restriction, U.S. sanctions are announced and implemented by different executive departments, typically the Treasury Department (OFAC) or the Commerce Department (BIS), and sometimes in conjunction with the State, Defense, or Energy departments.

Comprehensively sanctioned jurisdictions

Comprehensively sanctioned jurisdictions are subject to the most restrictive sanctions measures. Most transactions between a U.S. person and any person or entity "ordinarily resident" in a comprehensively sanctioned jurisdiction is restricted. In addition to the general sanctions listed below, transactions involving entities or individuals from these countries on OFAC's SDN List or BIS' Entity List are also restricted.

Targeted sanctions

In jurisdictions not subject to comprehensive sanctions measures, only transactions related to specific parties are prohibited. Jurisdictions that face targeted sanctions may continue to do business with the United States, with restrictions only placed on specific categories of individuals or entities, and anyone worldwide who materially supports or provides financial, logistical, or technological support for them.

According to OFAC, there are approximately 12,000 names on the Specially Designated Nationals and Blocked Persons List (SDN) list, which is the most restrictive category of targeted U.S. sanctions, targeting U.S.-designated terrorists, officials and beneficiaries of certain authoritarian regimes, and international criminals (e.g. drug traffickers) by blocking their U.S. assets and restricting U.S. persons from engaging in any transactions with them.

The following jurisdictions have been designated a specific sanctions program used by OFAC to determine SDN designations targeting individuals or entities engaging in sanctionable activities related to the targeted sanctions restrictions placed on that jurisdiction:

Human rights abuses/corruption

Building off the Global Magnitsky Human Rights Accountability Act, named after Sergei Magnitsky who died in Russian custody after uncovering corruption, the U.S. can enact sanctions against any individual or entity worldwide who engages in severe human rights abuses and corruption that degrade the rule of law, perpetuate violent conflicts, and facilitate the activities of dangerous persons. The following list include some jurisdictions that are frequently targeted by U.S. sanctions related to human rights abuses but are not specifically targeted under a country-specific sanctions program:

Terrorism

Some of the jurisdictions whose resident individuals or entities are frequently targeted for sanctions under counter-terrorism authorities include:

Drug trafficking/transnational criminal organizations

Some of the jurisdictions whose resident individuals or entities are frequently targeted for sanctions under anti-drug trafficking or transnational criminal organizations-related authorities include:

Jurisdictions subject to military/arms related export controls

Department of State Arms Embargo

The U.S. government maintains a policy of denial for any exports of defense articles or defense services to the following countries:

Department of Commerce Military End Use/User Rule

The U.S. government also enforces stricter restrictions on a more expansive definition of defense items, including the export of any U.S.-origin item that "supports or contributes" to the operation, installation, maintenance, repair, overhaul, refurbishing, development, or production of military items to specified countries. The same countries are also subject to additional license requirements in place for certain exports to the targeted countries' "military end users", defined as their national armed services, national police, national intelligence services, and anyone whose activities "support or contribute to military end uses."

•  Cambodia
•  China
•  Myanmar
•  Nicaragua
•  Venezuela

Russia/Belarus MEU FDP Rule

Russia and Belarus are subject to the same restrictions as the military end use/user rule, with a more expansive coverage that includes foreign-produced items that are produced using U.S.-origin software or technology, manufactured by plants or major components that are products of the U.S.

•  Belarus
•  Russia

Former sanctions

Effect of U.S. sanctions

Since 1990, the use of sanctions by the United States has significantly increased, and since 1998, the US has established economic sanctions on more than 20 countries.

A series of studies led by economist Gary Hafbauer has found destabilization of the sanctioned country is the frequent goal of US sanctions programs. Destabilization occurs when people in the sanctioned country lose confidence in their government's ability to operate the country and viable alternatives for them to consider exist.

According to Daniel T. Griswold, sanctions failed to change the behavior of sanctioned countries but they have barred American companies from economic opportunities and harmed the poorest people in the countries under sanctions. Secondary sanctions, according to Rawi Abdelal, often separate the US and Europe because they reflect US interference in the affairs and interests of the European Union (EU). Abdelal said since Donald Trump became President of the United States, sanctions have been seen as an expression of Washington's preferences and whims, and as a tool for US economic warfare that has angered historical allies such as the EU.

Efficacy

The increase in the use of economic leverage as a US foreign policy tool has prompted a debate about its usefulness and effectiveness. According to Rawi Abdelal, sanctions have become the dominant tool of statecraft of the US and other Western countries in the post-Cold War era. Abdelal stated; "sanctions are useful when diplomacy is not sufficient but force is too costly". British diplomat Jeremy Greenstock said sanctions are popular because "there is nothing else [to do] between words and military action if you want to bring pressure upon a government". Former CIA Deputy Director David Cohen wrote: "The logic of coercive sanctions does not hold, however, when the objective of sanctions is regime change. Put simply, because the cost of relinquishing power will always exceed the benefit of sanctions relief, a targeted state cannot conceivably accede to a demand for regime change."

Most international relations scholarship concludes sanctions almost never lead to overthrow of sanctioned countries' governments or compliance by those governments. More often, the outcome of economic sanctions is the entrenchment in power of state elites in the sanctioned country. In a study of US sanctions from 1981 to 2000, political scientist Dursan Peksen found sanctions have been counterproductive, failing to improve human rights and instead leading to a further decrese in sanctioned countries' "respect for physical integrity rights, including freedom from disappearances, extrajudicial killings, torture, and political imprisonment". Economists Hufbauer, Schott, and Elliot state while policymakers often have high expectations of the efficacy of sanctions, there is at most a weak correlation between economic deprivation and the political inclination to change. Griswold wrote sanctions are a foreign policy failure, having failed to change the political behavior of sanctioned countries; they have also barred American companies from economic opportunities and harmed the poorest people in the sanctioned countries. A study by the Peterson Institute for International Economics said sanctions have achieved their goals in fewer than 20% of cases. According to Griswold, as an example, the US Nuclear Proliferation Prevention Act of 1994 could not stop Pakistan and India from testing nuclear weapons.

Political scientist Lisa Martin criticized a game theory view of sanctions, stating proponents of sanctions characterize success so broadly—applying it to a range of outcomes from "renegotiation" to "influencing global public opinion—the terminology of "winning" and "losing" overextends those concepts.

Efficacy of sanctions against Russia

The United States imposed sanctions against Russia following the Russian invasion of Ukraine.^: 145 Asian countries, primarily China and India, absorbed an increasing amount of Russian oil and gas.^: 145 Because Russian imports from the West declined after sanctions, Russia's trade balance rose sharply, increasing cash reserves and the economy generally.^: 145 By June 2022, the Russian ruble had risen sharply and was one of the world's best performing countries.^: 145 Academic Jeremy Garlick writes that at least in the short term, sanctions against Russia has backfired economically by benefitting its economy and backfired geopolitically by bringing Russia and China closer together.^: 145

Humanitarian concerns

Daniel T. Griswold of the Cato Institute criticizes sanctions from a conservative Christian perspective, writing sanctions limit the possibilities of a sanctioned country's people to exercise political liberties and practice market freedom. In 1997, the American Association for World Health stated the US embargo against Cuba contributed to malnutrition, poor water access, and lack of access to medicine and other medical supplies; it concluded "a humanitarian catastrophe has been averted only because the Cuban government has maintained a high level of budgetary support for a health care system designed to deliver primary and preventative medicine to all its citizens".

Economist Helen Yaffe estimates United States sanctions against Venezuela have caused the deaths of 100,000 people due to the difficulty of importing medicine and health care equipment.

According to journalist Elijah J Magnier in Middle East Eye, the West—led by America and Europe—had not sent any immediate aid to Syria after the 2023 Turkey–Syria earthquake. According to Magnier, some mainstream media incorrectly stated President Bashar al-Assad was preventing humanitarian aid from reach the Turkish-occupied northwestern provinces of Syria and border crossings. According to one Western diplomat; "the goal is to get the Syrian people to blame their president for western countries’ refusal to provide aid".

U.S. economic decoupling

According to Abdelal, US sanctions on its own internal economy cost almost nothing but overuse of them could be costly in the long term. Abdelal said the biggest threat is the US's gradual isolation and the continuing decline of US influence in the context of an emerging, multi-polar world with differing financial and economic powers. Abdelal also said the US and Europe largely agree on the substance of sanctions but disagree on their implementation. The main issue is secondary US sanctions—also known as extraterritorial sanctions—which prohibit any trading in US dollars and prevent trade with a country, individuals and organizations under the US sanctions regime. Primary sanctions restrict US companies, institutions, and citizens from doing business with the country or entities under sanctions. According to Abdelal, secondary sanctions often separate the US and Europe because they reflect US interference in the EU's affairs and interests. Increasing use of secondary sanctions increases their perception in the EU as a violation of national and EU sovereignty, and an unacceptable interference in the EU's independent decision-making. Secondary sanctions imposed on Iran and Russia are central to these tensions, and have become the primary tool for signaling and implementing secession from US and European political goals.

In 2019, the United States Department of State reported it received complaints from American telecommunications providers and television companies the sanctions against Cuba caused difficulties in incorporating the country into their grid coverage.

De-dollarization efforts

Retired business-studies academic Tim Beal views the US's imposition of financial sanctions as a factor increasing dedollarization efforts because of responses like the Russian-developed System for Transfers of Financial Messages (SPFS), the China-supported Cross-Border Interbank Payment System (CIPS), and the European Instrument in Support of Trade Exchanges (INSTEX) that followed the US's withdrawal of from the Joint Comprehensive Plan of Action (JCPOA) with Iran.

Historian Renate Bridenthal wrote; "the most looming blowback to US sanctions policy is the growing set of challenges to dollar hegemony". Bridenthal cited the use of local currencies to trade with sanctioned countries, and attempts by Russia and China to increase the gold backing of their respective currencies.

Implementing agencies

• Bureau of Industry and Security
• Directorate of Defense Trade Controls
• Office of Foreign Assets Control
• U.S. Customs and Border Protection
• United States Department of Commerce (Export Administration Regulations, EAR)
• United States Department of Defense
• United States Department of Energy (nuclear technology)
• United States Department of Homeland Security (border crossings)
• United States Department of Justice (including ATF and FBI)
• United States Department of State (International Traffic in Arms Regulations, ITAR)
• United States Department of the Treasury

Authorizing laws

Several laws delegate embargo power to the President:

• Trading with the Enemy Act of 1917
• Foreign Assistance Act of 1961
• International Emergency Economic Powers Act of 1977
• Export Administration Act of 1979

Several laws specifically prohibit trade with certain countries:

• Cuban Assets Control Regulations of 1963
• Cuban Democracy Act of 1992
• Helms–Burton Act of 1996 (Cuba)
• Iran and Libya Sanctions Act of 1996
• Trade Sanction Reform and Export Enhancement Act of 2000 (Cuba)
• Iran Freedom and Support Act of 2006
• Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010

Footnotes

See also

• State Sponsors of Terrorism (U.S. list) – placement on the list puts severe restrictions on trade with that nation
• Specially Designated Nationals and Blocked Persons List
• United States sanctions against China
• Caesar Syria Civilian Protection Act
• Rogue state
• Economic sanctions
• 2002 United States steel tariff
• Permanent normal trade relations
• Arms Export Control Act
• United States and state terrorism
• Criticism of United States foreign policy
• European Union sanctions
• United Kingdom sanctions
• United States foreign adversaries

References

Citations

Sources

• Abdelal, Rawi; Bros, Aurélie (2020). "The End of Transatlanticism?: How Sanctions Are Dividing the West". Horizons: Journal of International Relations and Sustainable Development. 16 (16). Center for International Relations and Sustainable Development: 114–135. JSTOR 48573754.
• Lenway, Stefanie Ann (1988). "Between war and Commerce: economic sanctions as a tool of statecraft". International Organization. 42 (2). Cambridge University Press: 397–426. doi:10.1017/S0020818300032860. S2CID 154337246.

Further reading

• Hufbauer, Gary C. Economic sanctions and American diplomacy (Council on Foreign Relations, 1998) online.
• Hufbauer, Gary C., Jeffrey J. Schott, and Kimberley Ann Elliott. Economic Sanctions Reconsidered: History and Current Policy (Washington DC: Peterson Institute for International Economics, 1990)
• Krugman, Paul, "The American Way of Economic war: Is Washington Overusing Its Most Powerful Weapons?" (review of Henry Farrell and Abraham Newman, Underground Empire: How America Weaponized the World Economy, Henry Holt, 2023, 288 pp.), Foreign Affairs, vol. 103, no. 1 (January/February 2024), pp. 150–156.
• Mulder, Nicholas. The Economic Weapon: The Rise of Sanctions as a Tool of Modern War (2022) also see online review

External links

• Sanctions Programs and Country Information (United States Department of the Treasury)
• Commerce Control List (Bureau of Industry and Security)