Global Sanctions Dashboard: Groundhog Edition
In our previous edition of Global Sanctions Dashboard, we discussed the growing anti-kleptocracy movement in the United States and dug into designations across Africa. For this month groundhog edition– as Russia keeps us all in suspense in and around Ukraine – we will review the current sanctions against Russia and the potential consequences the Kremlin could face if it decides to invade (to new). We will also look at Iran sanctions (yes, sanctions against Iran too) before the negotiations in Vienna. In this little world, it feels like history repeats itself, so it’s only fitting that the little guy saw his shadow last week.
Last year, on one card
Looking at this visual summary of the past year, something should hold you back, not least radiation in parts of the world we haven’t covered in a while. OFAC’s largest sanctions program, Specially Designated Narcotics Trafficking Kingpin (otherwise known as “SDNTK”), experiences periodic batches of major designations and delistings. Last year, OFAC removed 494 Colombian delegates, mostly from its SDTNK list. The largest batch followed the November 2021 State Department announcement revokethe terrorism designation of the Revolutionary Armed Forces of Colombia (FARC). Some individuals designated by the FARC have been re-listed to OFAC’s Foreign Terrorist Organizations (FTO) list for continued engagement in terrorist activities. In case you missed it, the FARC ceased to be a military organization in 2017.
Over the past year, the United Nations has begun write-offs for Resolution 1518, which in 2003 authorized sanctions targeting Saddam Hussein’s assets. These refunds were made in many slices, totaling 60 targets. If you take away a lesson here from all this, it is that once you are designated for terrorism, it is very difficult to prove otherwise.
The old is new in the new year
In January, OFAC designated seven individuals and one entity charged with advancing North Korea’s ballistic missile programs, including the DPRK’s testing of six missiles since September 2021. Further listings are likely to occur as North Korea continues its program in violation of several UN resolutions. The DPRK is tied with Syria as the most sanctioned jurisdiction in the world, but with support from China and Russia, respectively, neither shows any prospect of changing course.
To the Balkans. In early January, OFAC re-sanctioned Milorad Dodik and his media company, Alternativna Televizija, for corruption and efforts to undermine the unity of Bosnia and Herzegovina in a new version of the Balkans Executive Decree. Milorad Dodik is the Serbian member of the three-person presidential body that governs Bosnia and has been sanctioned by OFAC since 2017 for his efforts to destabilize the country. Dodik continues to bellow nationalist rhetoric to win support for secession while handing out government contracts to his close associates throughout Republika Srpska.
Moscow game dice
Russia has been sanctioned by Australia, Canada, the European Union, France, Switzerland, the United Kingdom and the United States for its occupation of Ukrainian territory since 2014. The concept was then new, sanctioning a major world economy and using new instruments. such as limiting the maturity of debt and equity. Things are different now. As Putin’s decoding continues, Western policymakers are debating actions that weren’t on the cards eight years ago. Instead of “changing the calculus” of Russia’s inner circle, the United States and its partners are pledging to punish the wider Russian economy, spurring capital flight and weakening the rouble.
Options include sanctions against oligarchs, oil and gas, the mining sector and major Russian banks (including Sberbank, VTB, Gazprombank, Russian Direct Investment Fund). The administration can even invoke the foreign direct product rule to restrict exports of technical components critical to Russian conventional weapons systems (like the Elbrus-8CB microprocessor chip), a move that could have major implications for governments. and business (remember Huawei?). A flagship measure would be to stop the Nord Stream 2 gas pipeline. Biden even reported his desire to sanction Putin himself. UK Foreign Secretary Liz Truss said her government to unveil legislation that would allow Britain to sanction “Kremlin-friendly oligarchs,” expanding authorities tied to Russian actions on the ground.
Congress is also back in the game. 2022 Law on Defense of Sovereignty of Ukraine would adopt a series of mandatory and discretionary measures, including a ban on transactions in primary and secondary Russian sovereign debt. The bill also calls for public disclosure of Putin’s financial assets and practices, an acknowledgment that illicit financing has direct US national security implications.
Among all these conversations, if the Russians minimize the threat of sanctions by saying that they have seen many things before, they state a fact. Spend some time with this chart where we have compiled the sanctions against Russia from around the world. Yes, even Indonesia has sanctions against Russia. From terrorism to cyberattacks, chemical weapons, human rights abuses and support for the regime of Assad, Maduro and Lukashenko in Belarus, countries have found a way to express their displeasure with the Kremlin. For us, the data lends some credence to Russia’s perception of sanctions inflation.
Back in Moscow, the sanctions continue to mean something different from what Western countries think they mean. Russia’s main sanctioning authority – Rosfinmonitoring –designated Alexei Navalny under his “terrorists and extremists” list, along with five of his closest associates. A week earlier, Navalny aides Leonid Volkov and Ivan Zhdanov were added to the same list as part of the Kremlin’s attack on those it fears. We are far from the legal basis of Western sanctions. We say rule of law, they say “rule of law”. Our takeaway? Perceptions and misperceptions of Russia, presented here through data, will determine the success of the Biden administration in using sanctions as a cornerstone of its policy of deterrence.
Iran’s Balancing Game
As nuclear talks in Vienna enter their final stages, negotiators hope to revive the 2015 deal with Iran and the United States as signatories. Any agreement acceptable to Tehran would ease sanctions and open up international markets, and the United States has begun to restore some waiver provisions. But while much of the focus has been on multilateral sanctions vs Iran, almost no attention is paid to Iran’s use of sanctions, which is now part of our database. On the second anniversary of the assassination of Iranian General Qassem Soleimani, Tehran sanctioned 51 Americans believed to be involved. After the Trump administration’s “maximum pressure campaign” failed to bring Iran back to negotiations, political leaders in Tehran offered a salutary response to Soleimani’s assassination, decrying the US military and Trump’s team, while agreeing to negotiate again with the new American leadership.
On the radar
Last week, the European Parliament’s special committee on foreign interference concluded its 18-month investigation into how the European Union can protect itself against foreign interference, with a particular focus on Russia and China. One of the main conclusions of the report was that the EU should consider sanctions. The United States has sanctioned various targets for spreading disinformation under Executive Order 13848, which was created to counter election interference efforts, but has no statutory application to general disinformation operations. Good luck in the European Parliament defining sanctionable disinformation.
Last but not least: Chinese military sanctions. The US Treasury continues to add Chinese entities to its non-SDN list of companies linked to the Chinese military-industrial complex, which prohibits named companies from listing on US stock markets. The use of this authority is likely to expand and become increasingly complicated as debate intensifies around the role that US investment plays in advancing Chinese technology. Congress and the executive branch are proposing options to restrict US investment abroad in sensitive sectors, including through capital markets. Navigating this issue promises a complicated intersection of law, financial regulation and the national security prerogative.
Global Sanctions Dashboard
The Global Sanctions Dashboard provides a comprehensive overview of the various sanctions regimes and lists. Each month you will find an update on the most recent registrations and deregistrations and an overview of the motivations behind them.
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