On April 15, Adam Szubin, OFAC Acting Under Secretary for Terrorism and Financial Intelligence, spoke at the Center for a New American Security (CNAS) on key lessons learned from U.S. sanctions programs. In this discussion, he called out the following three key lessons as particularly important in guiding agency action relating to the implementation and enforcement of sanctions:

  • For a sanctions program to be effective, international buy in is key. This is because multilateral sanctions programs are easier to enforce than unilateral programs given the incentives for compliance and the limited opportunities for circumvention, as demonstrated by the Iran and Cuba sanctions programs, which are on opposite ends of this spectrum.
  • The effectiveness of sanctions programs relies on well defined objectives and criteria for removal. Without these elements, sanctions lose their ability to encourage sanctions targets, such as governments, entities and individuals, to alter their behavior.
  • Effective sanctions programs require calibration. This is aided by cooperation with governments and international organizations (e.g., IMF and the World Bank), as well as through dialogue with the private sector on the effectiveness of sanctions in meeting their objectives.

With respect to U.S. sanctions policy going forward, Mr. Szubin noted a concerted effort by OFAC to take into account the costs of sanctions to U.S. interests abroad, given their impact on diplomatic relations, commercial activity and the risk of retaliation. He also noted that these costs were particularly high in the context of secondary sanctions, which primarily target foreign persons and have been received with a great deal of skepticism by the international community. In light of this, Mr. Szubin proposes a future sanctions strategy that sees use of "sanctions only in tandem with other tools, and only when the intended policy goal is important enough to justify sustaining the associated costs." Assuming that this policy is continued, this could result in a shift away from unilateral sanctions, as well as more limited use of secondary sanctions.

To read Adam Szubin's remarks, see the OFAC press release.

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