Why Congress Needs an Annual Review of U.S. Sanctions Policy

The U.S. has sanctions out on a handful of countries (and people), from Russia to China, Cuba to Venezuela. Are they working? Or do the unintended consequences outweigh many of its benefits?

Rep. Jim McGovern (D-MA-2) asked a panel of sanctions policy experts on Oct. 4 if Congress should have an annual review of its sanctions policies. He believed they do.

“We are not reviewing these things methodically in Congress,” he said, leading a Tom Lantos Human Rights Commission hearing in the House of Representatives on Tuesday.

“We impose sanctions and that’s it and there are all sorts of political forces that make it very difficult to revisit these things…but are they achieving what they are intended to achieve or are we making things worse and putting ourselves at a disadvantage?” he asked. “We have to make sanctions effective and reverse the collateral effects like sanctions exacerbating humanitarian crises…like they did in Venezuela. Legal risks can lead private sector actors to stop working in a country altogether even if their services are needed, and sanctions could undermine the dollar as the reserve currency. I bet if you did a poll in Congress as to what the sanctions are against Cuba, for example, they wouldn’t know. Yet, we have all these Cubans coming in through the Mexican border,” he said, giving an example of how sanctions often hurt people downwind of the targeted country’s power structure, impacting the U.S. in a myriad of ways, such as higher than normal immigration flow.

Panelists agreed that sanctions were not perfect. They all said that the sanctions regimes are either ignored by the sanctioned states or make matters worse for its citizens. Some warned Washington that China and Russia will take increased sanctions policies as a signal to avoid dollar transactions, making it even harder to sanction them.

Panelist Bruce W. Jentleson, a professor of public policy and political science at Duke University, and a fellow at the Woodrow Wilson International Center for Scholars were one of four panelists. He said the U.S. needed sanctions as leverage, but sanctions needed to have a clear goal.

“I don’t think our sanctions on Russia worked, as a deterrent, for example,” he told Rep. McGovern and Rep. Chris Smith (R-NJ-4), a staunch human rights advocate in Washington who brought the Global Magnitsky Act to the fore. “They have really weakened Russian military capabilities, though. What sanctions ultimately do is strengthen your hand in leverage, so if you get to a point where you are lifting sanctions, you have to get something in return for it.”

In other words, we may not see the full effect of U.S. sanctions on Russia over the war in Ukraine unless we reached a negotiating position with Russia, whereby lifting sanctions can be given as a carrot in exchange for a concession or other desirable action.

He mentioned a 2019 study on sanctions policy by the U.S. Government Accountability Office (GAO) that looked at the economic impacts of sanctions. The takeaway of that study, according to Jentleson, was that focusing on the economic impact was not enough for sanctions to work in bringing an adversarial nation to heel.

“You have to move away from this view that decimating a country’s economy is somehow effective sanctions policy,” said Dr. Erica Moret, senior researcher on international sanctions at the Geneva Centre of Humanitarian Studies.

Congress has great difficulty lifting sanctions. Domestic politics often come into play, with new sanctions being levied on top of old sanctions so as not to appear weak. Sunset clauses on sanctions – or an expiration date – would permit some deliberation by Congress to take place and decide whether to continue with the policy, and to what end.

There were some skeptics about sunset clauses and Congressional review. Daniel W. Drezner, professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University, was one of them.

“I don’t think Congress should play an active role,” he said. “For sanctions to work there just has to be a commitment to impose them and a commitment to lift them and I am skeptical of Congress’ ability to lift them because of politics.”

Sanctions are an effective tool of U.S. foreign policy and a key part of the national security toolkit. This hearing, however, focused only on a certain type of sanction – looking at outright bans on trade and certain economic activities with countries like Venezuela, Cuba, North Korea, or Iran. There are lots of other types of sanctions and methods by which the U.S. can exact policy outcomes. The U.S. can and does sanction a country’s leadership, private individuals, central banks, and companies – and can also preclude American capital and assets from flowing to hostile parties.

CPA supports Congressional involvement in reviewing and amending sanctions on a regularized basis via the sunset approach and other means, said Robby Saunders Smith, National Security Advisor with CPA.

“We also encourage Congress to take a more active role in overseeing sanctions as well as prescribing specific actions for the executive branch to implement. Oftentimes, due to a lack of Congressional involvement, sanctions implementation becomes an interagency fight whereby the Treasury Department (the one who technically levies the sanctions) bulldozes its way over the other cabinet level departments who actually have the national security and foreign policy information and expertise. This is problematic because Treasury has other interests and constituencies to consider, like Wall Street. If Congress is more involved or gives more authority to other departments and agencies to engage in the sanctions process, we believe the interagency process would be more effective and balanced.” – Robby Smith Saunders, CPA National Security Advisor.

Smith said Congress needs to update old policies and amend them for better utilization (such as the Global Magnitsky Act), codify and clarify certain policies of the executive branch (capital markets sanctions/Non-SDN Chinese Military Industrial Complex Companies List), and create new tools (sanctions harmonization requirements, a State Department-led Corporate Human Rights Abusers List).

“Congress must make sure that the federal government and Americans are not investing capital in sanctioned companies,” she said, which is not the case today. Many Chinese companies on the Commerce Department’s Entity List count Vanguard and others as shareholders. “The Congress must include — in a sanctions review – any sort of hypocrisy in the U.S. policy apparatus of blocking bad actors or certain assets for certain activities but still allowing investment funds to buy their securities.”

Rep. McGovern asked for some good and bad examples of U.S. sanctions policy.

Drezner immediately said Venezuela sanctions. “There were decent reasons to believe that the sanctions might work. But while they have somewhat weakened the Maduro regime, it has created a stronger flow of migrants across the entire hemisphere. Venezuela sanctions were a catastrophic failure,” he said, adding the Iran nuclear deal as his pick for positive sanctions. “It worked because Obama said sanctions would be lifted if Iran abandoned its nuclear program. You need a simple, concrete policy goal.”

Sanctions on Iran were an effective tool to bring the regime to the table that lead to the eventual Joint Comprehensive Plan of Action, demonstrating that sanctions, when leveraged to be lifted when conditions are met, can be an effective tool for reaching the desired end state – the Iran nuclear deal.

Drezner recommended that either the State Department or the GAO conduct annual sanctions impact assessments. “Washington needs to assess what were the real economic effects on the target population, not just on the targeted regime,” he said.


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