Sanctions Policy Under the Biden Administration: What do we know so far?

In May 2021, I had the fun opportunity to reflect on the first few month of Biden admin sanctions policy with Tatiana Serafin and Nick Gvosdev of the Doorstep podcast sponsored by the Carnegie Council. You can watch the video below or read the transcript in full (some excerpts can be found below).

Overall in their first four months, the Biden administration has focused on targeting sanctions (including avoiding exacerbating humanitarian crises), cleaning up some of the hastily implemented and poorly constructed sanctions (including some in China), responding to crises (Myanmar, Russia), coordinating with allies (especially Canada, EU, UK, mostly on human rights/corruption linked measures) and their ongoing review. There are some major areas of continuity/expansion but one big theme is greater coordination of all tools across the government (financial sanctions, investment and export restrictions) and… some greater focus (with an assist by Congress to deploy also some of the positive sides of the economic policy toolkit such as greater R&D spending not just the restrictive ones. This is critical not just to US resilience but also for providing incentives for allies to collaborate. The challenge is that restrictive tools are often seen as cost-less (they aren’t). Watch or read more in the podcast.

 I think one of the things that Biden and his team have come in with—especially those in WH and those working for Secretaries Yellen and Blinken —is a focus on trying to make sanctions more effective.

The first thing I often end up thinking about when I think about effectiveness is: Effectiveness of what? At the end of the day these are foreign policy tools, so effectiveness should be around policy change. It shouldn’t just be around can you inflict economic pain—right? We can be very good at constructing things that cause economic pain, but those sometimes can actually undermine that sort of policy change that one might be looking for. 

A lot of research, academic and policy-oriented, suggests for example that central government actors or dominant players in economies linked to a military can actually end up stronger even if they’re the ones sanctioned. We can look at examples like the Islamic Revolutionary Guard Corps (IRGC) in Iran for example, which has, if anything, consolidated power. We can also look at large state or state-linked entities in Russia who were some of the only ones who could gather together the foreign exchange. So in one way of looking at it you might say that that was an unintended consequence.

One of the things Biden and his team, who include a number of my former colleagues at CNAS, are really trying to think about is: How do you target this better? They have interpreted that to mean targeting on entities that can change policies, attempts to avoid punishing the population and better focus on decision makers. At present they haven’t lifted broad sectoral sanctions, but they have avoided imposing them in new/renewed programs like Myanmar. And they are slowly making adjustments to allow for humanitarian trade which is legal.

Back to your question of do we have cases where sanctions have been effective in prompting policy change, the list is not long: Iran sort of in and around 2012 to sort of 2015, the Joint Comprehensive Plan of Action (JCPOA) is often an example cited; South Africa towards the end of apartheid is often cited. 

There are other partial examples where the best we can say is, “Well, maybe they stopped the entity from doing more of the behavior.” For example, how do we exactly interpret Russia in 2014–2015; would they have gone on to Kiev if the sanctions hadn’t been imposed? There are other questions there.

But I think in all the cases that worked—or “sort of” worked—we see a dynamic not only where there is a desire to avoid and alleviate economic pain but maybe there is some upside towards compliance or a shift. For example, the Iranians thought, Not only will we avoid this damaging search situation, but maybe we can actually get access to U.S. products or European products. So I think you need both that removal of the negative and the positive.

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