October 19, 2021
The Department of Treasury released its much-anticipated review of economic sanctions in a nine-page document on Oct. 18, 2021 that, while noting the need to address “unintended consequences of current sanctions regimes on humanitarian activity,” did not include concrete steps to do so or mention any of the specific proposals submitted by civil society organizations, including the Charity & Security Network. Despite previous statements to the effect that it would weigh costs and benefits of sanctions, the review explicitly said it did not assess existing sanctions programs. However, it did acknowledge the need for “a structured policy framework that links sanctions to a clear policy objective.”
In a statement responding to the review, C&SN Director Paul Carroll said, “The review is at best a baby step towards a smarter sanctions policy, but this can’t be all there is. The lack of depth in this review underscores the need for a more robust form of accountability for U.S. sanctions and their unintended consequences.”
The first three pages of the review describe sanctions as a foreign policy tool whose use has increased 933% over the past 20 years. While citing a few examples of success, the report does not describe failures or instances where sanctions have not achieved their goals. Instead, it notes how technological innovations, including virtual currencies, threaten to undermine the power of the U.S. Dollar and as result, dilute the influence of sanctions.
The report sets out steps to “modernize sanctions to address current policy priorities.” It also commits Treasury to adopting “a structured policy framework that links sanctions to a clear policy objective.” This framework would ask if a sanctions program:
- Supports a clear policy objective within a broader U.S. government strategy
- Has been assessed to be the right tool for the circumstances
- Incorporates anticipated economic and political implications… and has been calibrated to mitigate unintended impacts
- Includes multilateral coordination and engagement
- Will be easily understood, enforceable and, where possible, reversible.
The report includes one paragraph devoted to addressing challenges sanctions create for humanitarian assistance “more systemically,” but does not commit to do anything more than continue Treasury’s existing review of authorities and expand humanitarian exceptions “where possible and appropriate.” These limitations are not defined or explained. It does say Treasury should provide clear guidance for humanitarian aid at the outset of a sanctions program. While Treasury has begun to issue General Licenses for new sanctions in some cases, they are inconsistent and, in the case of Afghanistan, do not include the full range of civil society programs in need of legal safeguards. This includes programs aimed at protecting women and girls as well as conflict mitigation and atrocity prevention programs.
In an Oct. 19 hearing of the Senate Committee on Banking, Housing, and Urban Affairs, Deputy Treasury Secretary Wally Adeyemo took questions on the review. Most notably, when Sen. Jon Ossoff (D-GA) asked Adeyemo if he could point to any specific cases where sanctions were ineffective, Adeyemo did not quite answer the question. When pressed, he admitted, “We did not spend time looking at the individual sanctions policies.” You can read his written witness testimony here.
Since the report did not live up to its billing as an assessment of costs and benefits of sanctions, the need for this important policy discussion remains. It can take place in Congress and in genuine efforts by Treasury to engage civil society, financial institutions and other key stakeholders in establishing the proposed structured policy framework and developing meaningful legal safeguards for civil society programs.