Abstract
Financial and economic sanctions are often adopted to serve multiple ends, including deterrence and prevention, but they are best understood as a tool to incentivize change in a target's behavior. In pursuit of this coercive objective, it is generally—but not always—the case that sanctions are more effective when they are imposed multilaterally, and the broader the coalition the better. This is because multilateral sanctions leverage the diverse sources of pressure that coalition partners can bring to bear on a target and carry with them the legitimacy of broad international support. Taken to its extreme, this argument may suggest that sanctions should always be multilateral, whether adopted through the United Nations, another forum, or an ad hoc coalition. But as we explain below, there are at least two significant reasons that militate in favor of unilateral sanctions. First, within the broad limits of international law, every country must retain the authority to impose sanctions to protect its sovereign security interests, even when it cannot muster a coalition of like-minded allies or a sufficient number of votes—and avoid a veto—on the UN Security Council. Second, imposing “smart” sanctions is actually a difficult business, requiring a complex administrative apparatus to design, build, implement, enforce, and defend them. International institutions, including the United Nations, are inherently less able to build the necessary structures to effectively enforce sanctions. For all of these reasons, two systems of sanctions—one national, one supranational—will likely coexist into the future.
Highlights
Financial and economic sanctions are often adopted to serve multiple ends, including deterrence and prevention, but they are best understood as a tool to incentivize change in a target’s behavior
Sanctions are a tool of foreign policy risk management, used both to address acute crises and to mitigate risk from long-term threats like terrorism and cyberattacks
In 2014, in response to Russia’s unlawful invasion of Crimea and eastern Ukraine, the United States and the European Union worked collaboratively to impose sanctions on Russia. Both the U.S and EU sanctions programs had three main components: a traditional “blocking” program that operated to freeze the assets of individuals and entities that were “designated” for participating in the Russian incursion; an economic blockade of Crimea, which Russia’s Parliament purported to annex in March 2014; and an innovative set of sanctions that restricted certain dealings in debt and equity issued by leading companies in Russia’s most important economic sectors, such as financial services, defense, and energy
Summary
Financial and economic sanctions are often adopted to serve multiple ends, including deterrence and prevention, but they are best understood as a tool to incentivize change in a target’s behavior. In 2014, in response to Russia’s unlawful invasion of Crimea and eastern Ukraine, the United States and the European Union worked collaboratively to impose sanctions on Russia Both the U.S and EU sanctions programs had three main components: a traditional “blocking” program that operated to freeze the assets of individuals and entities that were “designated” for participating in the Russian incursion (and for related reasons); an economic blockade of Crimea, which Russia’s Parliament purported to annex in March 2014; and an innovative set of sanctions that restricted certain dealings in debt and equity issued by leading companies in Russia’s most important economic sectors, such as financial services, defense, and energy. It highlights the importance of individual states using sanctions to manage risk even when they cannot muster sufficient support for a UN resolution
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