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Effective sanctions: incentives and UN-US dynamics.

As a means for responding to a wide array of national security concerns and violations of international norms, economic sanctions have occupied an increasingly prominent place in the tool kit of US policymakers. Ever since the United States championed UN Security Council Resolution 661 to expel Iraq from Kuwait in August 1990, it has imposed sanctions to restore democratically elected governments, protect human rights, extradite international fugitives, and end inter-state and civil wars. Especially after the Al Qaeda terrorist attacks of September 11, 2001, the United States has employed more specialized smart sanctions, both on its own and in conjunction with the UN Security Council, to combat what many claim to be the most serious contemporary threat to US and global security--the spread of international terrorism and the proliferation of weapons of mass destruction.


Although practitioners and politicians continue to resort to sanctions to punish wrongdoers, critical assessments of sanctions continue to be quite mixed. Some lament the limited success rate of sanctions, which most analysts consider to be 33 percent or lower. Others worry that Congressional trade and aid restrictions combine with UN-mandated sanctions to create a sanctions "epidemic" in US foreign and economic policy.

And yet, sanctions techniques have become increasingly effective. This trend can be attributed to a number of mutually reinforcing realities. First, policymakers from the United States and the international community now recognize those factors in sanctions formulation and implementation that lead to success. Second, the development of sharpened sanctions techniques--so-called "smart sanctions"--has replaced comprehensive trade sanctions. These provide states and international organizations with greater versatility of coercive economic measures while limiting the unanticipated humanitarian damage that sanctions can bring. Third, the success of sanctions necessitates astute consideration and management of the complex, symbiotic relationship that has emerged between the United States and the UN Security Council. This demands a coordinated strategy that balances sanctions and incentives as complementary tools designed to pressure and encourage delinquent states into changing their behavior.

Designing Successful Sanctions

The dozens of sanctions cases implemented since 1990 resulted in an impression of the international community as having a good idea of how to guarantee the success of a given sanction. Four considerations are particularly instructive for designing effective policies.

First, in this age of globalization, unilateral sanctions seldom succeed--multilateral support and cooperation are essential to the success of sanctions. In fact, when international (United Nations), regional (such as the European Union), and national authorities coordinate their actions to effectively monitor and enforce sanctions, target compliance increases significantly.

Second, sanctions as a means of punishment and isolation rarely succeed. Indeed, sanctions form only half of the mix of mechanisms needed to alter the behavior of stubborn targets. Positive inducements--the proverbial carrots of international economic and political relations--are a necessary complement to the sticks of a sanctions strategy. This is especially true in complex cases such as the control of weapons proliferation.

Third, sanctions succeed when they are a component of a larger foreign or international policy with multiple tools that collectively serve a specified end. When sanctions are the policy or are maintained for so long that they, de facto, become the policy, then they are no longer effective. This was the trap that the United States and United Nations fell into with sanctions against Iraq during the 1990s.

Finally, the structure of sanctions must be clear and credible. Both the imposers and the target must be in a reasonably full agreement on what constitutes compliance. Moreover, the target must be confident that if it changes its behavior, there will be a timely lifting of coercive pressure and an extension of promised benefits.

As policymakers have sought to integrate these considerations into their design of sanctions techniques, they have often opted for what have been deemed smart sanctions--refined monetary and financial asset freezes, travel bans, aviation sanctions, and commodity boycotts aimed narrowly at government officials or corporate entities responsible for objectionable policies. Since the mid-1990s, all UN and multilateral sanctions in which the United States has participated have been smart sanctions.

Some of the most notable successes in this area have been in interdicting "blood diamonds" and related financial networks in seven African internal wars. They have also been used effectively to capture financial assets and lock down fake passport and travel networks belonging to individuals affiliated with Al Qaeda in the first six months after the terrorist attacks of September 11, 2001. With these four considerations integrated into their framework, smart sanctions can continue to be used as effective tools for bringing about necessary changes of behavior in delinquent countries.

The Complicated UN-US Relationship

As with other national and international security tools, governments often use smart sanctions and the broader carrot-stick strategy against the backdrop of complex and often competitive political environments. For the United States, this includes international tensions that come from its partnership with the UN Security Council. The last two decades have been tumultuous for the UN-US relationship, with rifts that have varied from mutual displeasure to outright disdain. Often led by congressmen anxious to score domestic political points and sustained by presidential acquiescence, there has been a litany of accusations levied by US politicians against the United Nations--that it has a bloated bureaucracy, reeks of official corruption (e.g. the Oil-for-Food program), and promotes incompetent management. Such criticism provided the basis for Congress' decision to withhold payment of UN dues throughout the 1990s.

From its side, UN Secretaries-General and various governments sitting on the Security Council have charged the United States with a lack of leadership when UN action was called for in genocides in Bosnia, Rwanda, and Darfur. As the Iraqi sanctions unfolded in the 1990s, various UN diplomats and staff accused the United States of manipulating sanctions and weapons inspections for its own geopolitical agenda. The inability of the United States to build a consensus for Security Council action against Iraq led both Secretary-General Kofi Annan and various other Security Council members to condemn the United States for waging an unauthorized war against Iraq.


In the domestic context, congressional sanctions legislation, which reflects a wide range of salient domestic interests, may be out of sync with the sanctions obligations that the United States is under as a permanent member of the Security Council. Congress may therefore contravene the administration's UN-mandated actions. More recently, however, Congress has passed or renewed sanctions against a state in such a way that it permits the president to play a two-tiered strategy: he can be tough on the delinquent state by maintaining an exclusively US embargo, but he can also fulfill international obligations and end certain sanctions in accordance with UN policies.

The case of Libya from 1998 to 2004 illustrates this balancing act rather well. After six years under various UN sanctions, Libya agreed in 1998 to comply with UN demands to turn over suspects wanted in connection with the Pan Am 103 airline bombing to an international tribunal at The Hague. When this extradition was completed, the Security Council responded by suspending and eventually lifting UN sanctions on Libya.

However, Congress was under heavy pressure from domestic groups like the American Israel Public Affairs Committee to maintain substantial sanctions. It opted to maintain certain US sanctions and demanded that Tripoli take further steps to compensate the families of victims of terrorist attacks while cooperating in global counterterrorism and non-proliferation efforts. These policy discrepancies went unresolved until 2003 and caused many people to accuse the United States of "moving the goalposts" of sanctions demands.

Yet other realities, nuances, and political machinations complicate the UN-US sanctions nexus. One of the realities that has been difficult for Washington to comprehend is that smart sanctions seldom produce immediate and full compliance from targets. However, in a number of cases they produce partial compliance and generate pressure on targets to engage in further bargaining. Thus, the economic squeeze on the target comprises one level of success of smart sanctions. But the political success of getting the target to change its behavior results less from the economic pain it experiences and more from gains to be made at the bargaining table. Thus sanctions can be effective if they first force the delinquent state to negotiate after it has initially resisted and then ultimately lead to a political bargain.

In Yugoslavia during the early 1990s, sanctions eventually pressured Belgrade to accept the Dayton Accord. In Libya, sanctions were a central factor in the negotiations from the mid-1990s until a decade later that brought suspected terrorists to trial and convinced the regime to reduce its support of international terrorism. In Angola, sanctions that were initially ineffective became stronger over the years and combined with military and diplomatic pressures to weaken the UNITA rebel movement. And in Liberia, sanctions denied first resources, and then legitimacy, to the Charles Taylor regime.

There is, however, a pronounced limitation to UN-imposed smart sanctions--the Security Council has authorization only over the stick of coercive diplomacy. The carrot of economic incentives can only be provided by powerful Security Council members like the United States. Under the Bush Administration, the United States has had a mixed record of taking on this task as part of its relationship with the UN sanctions enterprise, especially when dealing with recalcitrant regimes. The reluctance to offer economic inducements, as often articulated by Secretary of State Condoleezza Rice, is grounded in the claim that offering carrots after or with the stick sends an inconsistent message to a target, which might misinterpret the incentive as weakness on the part of the United States. Another tenet of the Bush Administration's position on carrots is that they reward poor behavior. If these incentives are at all part of a sanctions package, proceeds the logic, they should be offered only after the target is in full compliance with international law.

Another problematic area emerges in the effective use of targeted financial sanctions, which require certain intelligence and research capabilities as well as the compilation of a list of persons and entities subject to sanctions. Because these tasks lie beyond UN institutional capabilities, national governmental units, such as the US Office of Foreign Assets in the US Treasury Department, supply these lists to relevant UN sanctions committees. Soon after September 11, concerns began to emerge about the accuracy and reliability of these lists, as well as the legal and human rights of those whose names appeared on them. Several of the individuals placed on the Al Qaeda and Taliban designation list complained that they were wrongfully targeted and that their civil and human rights had been violated. In addition, more than 50 UN member states have filed concerns about the lack of due process and absence of transparency involved in the listing process.

A more recent problem in the US-UN sanctions dynamic relates to a fundamental challenge of imposing sanctions. When states design sanctions, the measures they employ must be sufficient to have some bite. Sanctions that are merely symbolic will never succeed in modifying behavior. But it is also the case that UN sanctions that lack the full and active support of all permanent Security Council members will fail. Thus, the dilemma for a powerful actor like the United States is how to maximize both international cooperation in and also the robustness of a given sanctions resolution--even when the two may be in tension.

Anxious to demonstrate to targets like Iran and Sudan that the permanent five members are united in their condemnation of Iranian or Sudanese policies, the United Nations risks approving a watered-down sanctions resolution with relatively little potential for real economic coercion. In sacrificing coercive leverage for great power consensus, the United States (and the United Nations) may find this action self-defeating. As evinced by the actions of President Ahmadinejad of Iran, the recalcitrant targets can use the imposition of the sanctions as a domestic rallying cry. With no real pressure on the target to change its behavior, the United Nations will find such policies both ineffective and counterproductive.

Some analysts suggest that this is precisely when the United States should act unilaterally, imposing its own heavier penalties against these and possibly a much expanded list of targets. Such a multi-layered action is a delicate, if not dangerous, practice. It tempts states that have already agreed to a certain level of UN sanctions to renege on their agreements if they believe that the United States has exceeded the predetermined level of sanctioning. This was the case with Chinese sanctions against Sudanese leaders regarding Darfur. The United States must therefore be tactful about when and how it decides to seek a two-tiered sanctions approach that incorporates both consensus and clout.

Countering Proliferation

Efforts by the international community to counter the proliferation of weapons of mass destruction provide the best examples of ways in which smart sanctions tools can be used, and also demonstrate the complexity of sanctions politics between the United States and the United Nations. During the past two decades, imposing smart sanctions in conjunction with significant economic and strategic carrots has produced dramatic positive results. In Ukraine and Kazakhstan's decisions to give up the pursuit of nuclear weapons, South Africa's disavowal of the bomb, and the nuclear restraint agreements of Argentina and Brazil, substantial economic inducements and mutually conciliatory gestures were actually far more important than punishing sanctions.

As referenced earlier, many observers were surprised by Muammar Gaddafi's December 2003 decision to disclose and dismantle Libya's nuclear, chemical, and biological weapons programs, while also allowing international inspectors to verify compliance. This unprecedented decision was essentially brought about by long-term negotiations with the United States and Great Britain in which Gaddafi was promised not only a lifting of the sanctions, but also open access to European investors and markets.

Similarly, in the two instances of North Korea halting the development of its own nuclear program via the Agreed Framework of 1994 and in the Bush Administration's Six-Party Agreement of 2007, the methods and substance of compromise were nearly the same as in the Libyan case. The United States and its multilateral partners promised that if Korea complied with their demands, they would ease sanctions and grant a substantial food relief package and sustained fuel deliveries. North Korea gained access to these economic benefits in exchange for allowing a UN monitoring team to ensure that it was behaving in accordance with international standards.

And yet, as versatile and successful as a carrots and sticks approach has been with various states, the cases of India and Pakistan in the late 1990s and the more recent failure of sanctions and incentives to halt the Iranian uranium enrichment program serve as strong illustrations of how the method can fail through inconsistent application and poor communication. Washington's attempts to keep South Asia nuclear-free over the course of three decades were far too unilateral. In that context, they were also erratic, inconsistent, and subject to continued conflicts and exemptions in congressional and presidential decisions. The results were disastrous. Not only did India and Pakistan each develop and test nuclear weapons by 1998, but by focusing sanctions on the US export and aid sectors, the United States (and many other states) failed to detect or dissuade Abdul Qadeer Khan from building an illegal network for importing nuclear technologies.

With Iran, a major problem for nuclear deterrence has been how to dismantle the burdens of history. For example, the United States imposed unilateral, comprehensive sanctions on Iran in the wake of the 1979 hostage crisis, and it has maintained a consistently hostile policy toward Tehran ever since. In 1996, Congress passed the Iran and Libya Sanctions Act, which placed additional restrictions on US interactions with Iran and imposed secondary sanctions on foreign companies that were investing in Iran. These have continued in various forms, even though nearly 30 years of US sanctions have not significantly weakened the regime or altered its nuclear development efforts. In fact, these sanctions have been counterproductive, strengthening nationalist and conservative forces within Iran.

For a number of sensible reasons, the United States has shifted its stance to a more international condemnation of Tehran's persistent development of its uranium enrichment program. The Europeans have developed various incentive packages that could prove effective, and the United Nations has stung the Iranians with the smart sanctions of December 2006, which targeted the ruling elites. But a wider program of saber-rattling in the region by the United States as well as Iranian-US tensions in Iraq and Lebanon have complicated the possibility of peacefully resolving the uranium issue.

It is still possible that smart sanctions and incentives will play a role in thwarting Iranian nuclear designs, but not without a major stylistic shift in US policy. The United States could use the substantial stick of UN sanctions with its own economic carrots to pressure Iran to come to a summit in which they, the United States, and Europe would settle the diverse number of issues that separate them. Of course, the aforementioned reservations of the Bush Administration and the implied recognition of Iran as an equal at the table will make such a summit unlikely. But if such a policy were pursued, a mix of sanctions and incentives could set the stage for a grand bargain that would increase global security.

Conclusion: Subtlety and Sophistication

The precision and effectiveness of economic coercion now available to the US and other authorities via the imposition of smart sanctions is substantial. In particular, a blending of US and UN efforts to sanction terrorist groups, rogue state leaders, and non-state actors with brutal and law-violating practices has been successful for the past decade. But the prospect of failed implementation of smart sanctions always exists, especially in the case of high stakes issues like non-proliferation.

US leaders can incorrectly use sanctions for punishment and isolation, or they can combine these tools with incentives as part of a dynamic bargaining process that eases or increases pressure in response to cooperation or defiance. More than ever before, US policymakers are faced with substantial challenges in sanctions policy. This requires US elites to pay more attention to the conditions for smart sanctions success than they have in the past. In a sense, simply playing either the multilateral or unilateral card does not make for successful sanctions. It is the sophistication, if not the subtlety, of coordinating the UN-US dynamic that leads to success. Carrot and stick diplomacy that blends US action harmoniously with international efforts offers the best strategy for achieving the desired changes in the target's behavior.

GEORGE A. LOPEZ holds The Reverend Theodore M. Hesburgh, C.S.C. Chair in Peace Studies at the Joan B. Kroc Institute for International Peace Studies at the University of Notre Dame. He is the co-editor and author of Uniting Against Terrorism (MIT Press, 2007).

List of Active UN Sanctions

Target Measures Established

Al Qaeda/ Assets freeze; travel ban; arms Oct 1999
 Taliban embargo
Liberia Assets freeze; travel ban; arms Dec 2003
Democratic Assets freeze; travel ban; arms Mar 2004
 Republic embargo
 of Congo
Ivory Coast Diamond embargo; assets freeze; Nov 2004
 travel ban; arms embargo
Sudan Assets freeze; travel ban; arms Mar 2005
Lebanon Assets freeze; travel ban Oct 2005
DPRK (North Assets freeze; travel ban; arms Oct 2006
 Korea) embargo
Iran Nuclear and ballistic missile Dec 2006
 programmes-related embargo; ban
 on arms exports; travel
 notification requirements;
 assets freeze

UN Security Council Sanctions Committee (
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Title Annotation:weapons of market destruction: ECONOMICS OF SECURITY
Author:Lopez, George A.
Publication:Harvard International Review
Geographic Code:4E
Date:Sep 22, 2007
Previous Article:Rivals or partners? Globalization and US-China relations.
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