Sanctions and Foreign Policy
Sanctions can be effective when their objectives are limited, but typically cannot persuade governments to make fundamental policy changes, according to Washington Institute Iran sanctions expert Dr. Patrick Clawson, who spoke during a Center for the National Interest panel discussion of sanctions on July 12. Clawson, Morningstar Senior Fellow and Director of Research at the Washington Institute for Near East Policy, spoke with Dr. Matthew Rojansky, Director of the Kennan Institute at the Woodrow Wilson Center, and Dr. Andrew Small, Senior Transatlantic Fellow at the German Marshall Fund. Paul J. Saunders, the Center’s Executive Director, moderated the event.
Dr. Clawson noted that in the case of Iran, sanctions succeeded in bringing Iran to the negotiating table and ultimately in producing limited commitments by Iran (as well as limited actions by the United States). Though many people expressed dissatisfaction with the results of the Iran deal due to concerns about Iran’s connection with terrorism and its human rights record, Clawson asserted that these matters were not part of the deal, which focused narrowly on Iran’s nuclear program. Dr. Rojansky likewise agreed that U.S. sanctions on Russia have produced few changes in Russian conduct. The Magnitsky Act, which targets Russian officials involved in the Sergei Magnitsky case and others deemed human rights abusers with visa denials and asset freezes, succeeded making a symbolic moral statement but little more. Saunders suggested that the greater the impact of sanctions, the more likely the target country will view sanctions not as an alternative to war but as an act of war.
It seems that the Ukraine sanctions have also accomplished little, though Rojansky noted important differences between the two sets of sanctions. The Ukraine sanctions were coordinated closely with the EU, whereas the Magnitsky Act has no European analogue. Moreover, the Magnitsky sanctions are the result of legislation, where Ukraine sanctions rest strictly upon executive orders. While the Ukraine sanctions may have raised the costs to Russia sufficiently to convince Moscow to pursue the negotiations leading to the Minsk agreement, they have not significantly altered Russian behavior. Other sanctions have been counterproductive, he said—for instance, sanctioning North Caucasus officials under the Magnitsky Act has made getting information about terror suspects such as the Boston Marathon bomber much more difficult both before potential attacks and after tragedies.
The United States can also use the threat of sanctions strategically. As Saunders pointed out, the Jackson-Vanik Amendment was quite successful in encouraging the Soviet Union to permit greater Jewish emigration while it was under consideration in Congress. Once Jackson-Vanik became law, however, Moscow lost its incentive for flexibility. In Iran’s case, Clawson suggested that the threat of regular but uncertain additional future sanctions played a key role in persuading Iran’s leaders to enter negotiations with the United States. While governments can adjust to sanctions over time, Clawson said, the possibility of continuous new sanctions made this quite difficult for Tehran.
Even so, Clawson continued, sanctions on its oil exports did encourage Iran to diversify its economy—which, in the long term, is positive for Iran. Further, sanctions also inevitably produce lawyers, bankers and others who learn to work around their restrictions, Clawson said. Rojansky noted that some European exporters have already evaded Russia’s counter-sanctions on European agricultural products by shipping goods through third countries, which become the new points-of-origin.
The world order will likely continue to shift in response to the increased use of sanctions. This has already been happening in the case of China, said Dr. Small. Once either passive about sanctions or determined to block them, China has exhibited an increased willingness to embrace sanctions as a policy tool both multilaterally (as in dealing with Iran) and unilaterally, as in its suspension of rare earths exports to Japan. Chinese companies and state banks have been largely compliant with sanctions, as they acknowledge that access to Western markets generally remains more important to them than the economic benefits of trade with target countries.
At the same time, because China has seen the effect of U.S. sanctions on other nations, and faced sanctions itself following the Tiananmen Square protests in 1989, Beijing has also sought to reduce its own vulnerability to U.S. and Western sanctions, Small continued. This has been a key driver of Chinese efforts to create parallel multilateral financial institutions, he said. Nevertheless, Small explained, these institutions are inherently less efficient and effective because they are not universal. As a result, he argued, they will complement rather than replacing existing global institutions.
The panelists also briefly discussed the implications of Britain’s referendum on EU membership on sanctions policy. Small suggested that an independent UK would likely continue to support sanctions on Russia, though Rojansky argued that it had previously been on the periphery of EU discussions on the matter. Still, Small said, Britain’s absence from the EU could change the dynamics in its internal debates on sanctions. As a whole, the EU nations have marked differences in opinion on the continuation of Russian sanctions. Rojansky agreed that the UK would likely not lift sanctions, citing the difficulty of rescinding something that has been long in place.