Are sanctions an effective foreign policy tool?

Demonstrators flash the three-finger salute during an anti-military coup protest in Mandalay, Myanmar, 03 May 2021. Governments including the US and UK have been urged to slap more sanctions on military leaders as violence in the country continues to escalate. (EPA / STRINGER)

As the use of sanctions becomes more frequent, there are concerns they could become less effective while the difficulties they pose for humanitarian organisations grow more severe.

From targeting Russian officials linked to cyber-attacks to cutting off members of the Myanmar military junta, the first months of 2021 have brought a wave of fresh sanctions introduced by countries around the world.

An increasingly common foreign policy tool in recent years, sanctions are used to tackle everything from deterring nuclear proliferation to naming and shaming individuals for human rights abuses. But as their use becomes more frequent, there are concerns that their effectiveness could be waning. Not only do these policies sometimes fail to achieve their goals, but they often place undue economic and humanitarian burdens on the communities they set out to protect. This is prompting some experts in the field to say it could be time for a rethink.

A long history. The past few decades have seen a move away from the broad sanctions regimes of the 1980s and 1990s, when US sanctions which effectively targeted whole countries such as Iraq and Cuba prompted an outcry about the humanitarian implications of such measures.

What followed was a new era of targeted sanctions such as asset freezes and travel bans, which sought to lessen the impact on ordinary people while remaining effective on the targets in question, such as the US sanctions introduced after the 9/11 attacks in 2001 that aimed to cut off funding for terrorist groups.

However, this period may have been short-lived. In recent years, sanctioning countries like the US, UK and Canada, along with the EU, have imposed broad sanctions on places like Syria, Iran and Venezuela that have had far wider ramifications.

“In the last decade in particular but even more recently, we've seen this very rapid broadening of many sanctions regimes to cover entire sectors, and really important commodities - things like entire energy sectors,” explained Dr Erica Moret, a sanctions expert and senior researcher at the Geneva Centre of Humanitarian Studies, speaking to Geneva Solutions.

Although this intensified in the US around 2010, when Washington upped its use of so-called “secondary sanctions' ' which target both perceived offenders and anyone doing business associated with them, there was a sea-change under Donald Trump’s administration. Trump’s “maximum pressure campaign” brought in sweeping sanctions against China, Iran, Russia and Venezuela among others. The US still has more than 30 sanction regimes in place, although this may soon change as President Biden considers removing sanctions on Iran in return for a roll-back of its nuclear programme.

As well as being more wide-ranging, their increasingly frequent use by different powers - from the unilateral financial restrictions under the Trump-era to multilateral UN sanctions - has left many countries under layers and layers of sanctions, which in turn has serious humanitarian implications. In February 2020, there were over 34,000 explicit sanctions in place across 281 sanctions programmes by 50 countries or international bodies - a 62 per cent increase from September 2017.

“We now have multiple sanctions regimes in place,” explained Moret, who also took part in a  webinar on sanctions hosted by Network 20/20 last week .“You have a number of UN sanction regimes, but on top of that you will sometimes have layered a number of supplementary autonomous sanctions imposed by the US, the EU and a number of other countries, and also regional organisations. And so what we're getting is this very messy overlap of different sanctions regimes in different countries, to the extent that it's like a complex web that is very confusing for businesses and the nonprofit sector to navigate.”

Humanitarian repercussions.  Moret explained the complexity of sanctions regimes is a growing burden for organisations and companies trying to operate in heavily sanctioned countries. Fines for breaching US sanctions in particular can now run into the billions - in 2014, French bank Paribas was fined $8.9bn for processing transactions to “blacklisted” countries.

This creates a “chilling effect - a mounting reluctance to operate in heavily sanctioned countries because there’s a huge risk of fines.” The safe option is to avoid interaction with such countries altogether. While the boycotting of countries by financial institutions has clear economic consequences, the difficulties these multilayered sanctions create for humanitarian actors are also stark.

“It makes it very confusing and expensive and time consuming for NGOs, and the United Nations, and companies dealing in essential goods and so on to work out what they're allowed to do,” said Moret. As restrictions have intensified in countries such as Syria and Venezuela in recent years, scores of organisations have been left with little choice but to cease operations rather than risk crippling fines.

“Most humanitarian organisations aren’t big enough to have in-house legal team expertise to navigate these really complicated regulations and so many just simply withdraw from heavily sanctioned countries that are just too difficult, expensive or risky,” she added. This leads to a “shrinking of the humanitarian space” in countries where the need is often most severe.

Those organisations who remain in heavily sanctioned countries face a plethora of difficulties. For example, for a humanitarian organisation operating in Syria, getting money into the country via international transfer is now almost impossible, leaving many NGOs forced to carry cash into the country in order to pay staff.

Conflict between sanction regimes and international law also put humanitarian actors in an extremely difficult position. In Syria again, where designated terrorist groups, the majority of ministries and the military are under sanctions, avoiding any operations that may infringe on these terms – such as providing medical goods to a hospital that could treat military soldiers – would be a violation of their humanitarian principles.

“The fact that certain groups are out of bounds for humanitarian organisations is a direct breach of international humanitarian law,” said Moret. “If you're a humanitarian organisation and you're going to provide some goods to a hospital, you might need to prove that that hospital isn't going to treat Syrian military soldiers who might be sanctioned or might be treating somebody from ISIS. This is very worrying for [many people] in humanitarian organisations because it's completely at odds with what they're expected to do as humanitarian actors.”

Time for a global rethink? While sanctions remain an effective foreign policy tool in many ways, the difficulties they pose to humanitarian actors mean a major rethink of how they are implemented is needed, said Moret. “For me it's not enough now to just make little piecemeal policy changes and try to find sticking plaster solutions,” she said. “We need a major rethink that has to include the UN, the US, EU and others.”

Solutions recommended by experts range from clear goal-setting for sanctions to a possible democratic alliance of sanctioning countries who could be ready to implement multilateral sanctions when a crisis breaks out, curtailing the kind of impasse that is seen frequently at the UN security council.

The US treasury under the new Biden administration is currently doing a review of its sanctions policy, which Moret has been involved in as an advisor. “I think it's very promising that this is already happening in the US,” said Moret. “Because ultimately it’s the US’ extraterritorial and very hard hitting financial sanctions that are some of the most damaging.”

“We're in a new generation of more potent sanctions,” said Jeffrey J. Schott, senior fellow at the Peterson Institute for International Economics, who appeared alongside Moret during the panel discussion. “But more potent sanctions also have more significant collateral side effects and so we have to be very careful in their implementation.”

“There has to be a review of the sanctions policy,” he added, stating that the crunch point for US sanctions is looming in the form of the Biden administration’s approach to Russia and China. Legislation that would put heavy sanctions on China for human rights violations in Xinjiang is currently going through Congress.

“The maximum pressure strategy in the past hasn't been very effective ... We've had cases where we have tried to change regimes through maximum pressure, usually on a small country, and it's generally failed. And when it failed, the military had to come in and we went to war. We don't want to do that with Russia and we don't want to do that with China. We have to find some other way of using our international alliances to find a better response to exert displeasure and encourage better behaviour. ”