Criminal Defense Lawyers

Unintended Consequences of Sanctions Policies

Unintended Consequences of Sanctions Policies

Sanctions are economic or political penalties applied by one country or coalition against another to achieve certain policy goals. They usually aim to change the target’s behavior without resorting to full-scale war. However, sanctions often lead to unintended consequences that undermine the sanctions‘ intended effects or cause additional harm. This article will explore some common unintended results of sanctions policies.

Economic Blowback

One frequent unintended effect of sanctions is “blowback” on the sanctioning countries‘ own economies. For example:

• Trade sanctions reduce bilateral trade flows, which can hurt domestic companies that relied on exporting to or importing from the targeted nation. Farmers, manufacturers, and other industries may take an economic hit.
• Financial sanctions that block a target’s access to foreign banking systems can also end up isolating the sanctioning country’s banks and firms. They get cut off from trade finance, investment opportunities, and relationships in the targeted country.
• Travel and transportation sanctions disrupt tourism, air travel, shipping, and immigration flows. This stifles people-to-people ties and business travel.
• Asset freezes on foreign government officials and institutions can prompt retaliatory asset freezes, harming each other’s investors and companies.
• Sanctions often prompt retaliation from the targeted country, multiplying the economic costs to the sanctioning state. For example, China retaliated against U.S. tariffs by imposing its own tariffs on American goods.

To mitigate blowback, sanctioning countries often have to create complex exemption procedures. But these can be slow, costly, and still leave unintended harm.

Reinforcing the Target’s Narrative

Heavy-handed sanctions often play into the target government‘s narrative that they face foreign aggression, letting them justify domestic repression. For example:

• Sanctions allow the regime to blame economic problems on foreign meddling rather than their own mismanagement. This lets them divert blame and shore up nationalist sentiments.
• Restrictions on civil society aid and outreach are portrayed as attacks on the country’s sovereignty. This allows leaders to further crack down on NGOs and outside influence.
• Banning cultural exports like movies and music is cast as an assault on the country’s identity and cultural pride. This fuels resentment against the sanctioning power.
• Cutting off telecommunications technology is described as an information blockade. This provides cover for the regime’s own censorship and propaganda efforts.

Instead of being cornered into concessions, the targeted government often doubles down on authoritarian policies – the opposite of sanctions goals.

Hurting Ordinary Citizens More Than Leaders

Sanctions often disproportionately impact normal citizens more than the political elites they mean to coerce. For example:

• Financial sanctions raise borrowing costs, inflation, and bank fees for small businesses and households, not government accounts.
• Energy sanctions make heating, electricity, and fuel more expensive and scarce for citizens. But leaders have privileged access.
• Bans on technology like smartphones and computers deprive civilians, not officials, of access.
• Trade sanctions create shortages of imported food, medicine, and consumer goods for regular people.
• Travel bans prevent students, researchers, families, and immigrants from leaving or returning.

While regimes can often insulate themselves from sanctions‘ effects, normal people suffer declining living standards, economic uncertainty, and severed ties abroad. This often increases public resentment against the outside powers imposing sanctions, rather than the government itself.

Enabling Black Markets and Smuggling

Sanctions cut off legal trade and financing channels between countries, but illicit ones often emerge. For example:

• Banned luxury goods get smuggled through intermediary transit points and shell companies. This enriches smugglers.
• Black markets sprout up to connect sanctioned Iranian oil to international buyers, for example. This empowers shady middlemen.
• Restricted aviation and shipping services give way to convoluted routes to evade sanctions enforcement. This raises costs.
• Banned financial transfers get conducted through complex schemes involving multiple jurisdictions and fake identities. This benefits money launderers.
• Cryptocurrencies and underground banks increasingly enable funds transfers out of sanctioned countries, skirting controls.

Rather than isolating rogue regimes, sanctions often just distort trade and finance into gray market channels. This can enrich illicit networks while evading the sanctions’ goals.

Entrenching Authoritarian Regimes

Far from pressuring rogue regimes into reform, sanctions often entrench these governments further by cutting off pathways for change. For example:

• Economic sanctions devastate civil society groups, limiting their ability to mobilize. With reduced resources and international isolation, their push for human rights, democracy, and accountability is hindered.
• Sanctions breed public resentment against outside powers, rallying citizens to support the regime as a symbol of national pride and resistance. This reduces domestic pressure for reform.
• The regime diverts blame for all economic and social problems onto sanctions, using this narrative to deflect criticism of their own policies.
• Security services have justification to stamp out dissent and online criticism as alleged foreign subversion.
• Sanctions devastate the middle class – the social group most able to champion reform and democratic values. Their economic clout and political voice are diminished.
• Regime cronies often benefit from black markets and smuggling, getting richer and more invested in the status quo.

Rather than weakening authoritarian systems, sanctions often remove moderate alternatives and leave radical elements entrenched. This makes eventual political transitions more difficult.

Provoking Aggressive Counter-Moves

Finally, heavy-handed sanctions can provoke destabilizing responses from targeted regimes. For example:

• They may increase proxy warfare and destabilization efforts against neighboring states aligned with the sanctioning power.
• Cyberattacks and disinformation campaigns may be launched against critical infrastructure and elections in the sanctioning country.
• Military brinkmanship, border skirmishes, and shows of force often ensue as regimes demonstrate they won’t be cowed.
• Governments may violently crack down on protests and dissent to consolidate control before sanctions fully bite.
• There are risks of rapid nuclearization as regimes seek deterrent capabilities to resist economic pressure.
• Rogue states may veer toward each other for black market trade and military cooperation, undermining containment.

Rather than mitigating global threats, sanctions can incentivize targeted regimes to pursue asymmetric retaliation and escalation. This often decreases overall security.

Conclusion

Sanctions appeal to policymakers as an alternative to war for pressuring opponents. But they often entail substantial unintended consequences that undercut their own goals. Harming civilians, enriching smugglers, entrenching regimes, and inciting blowback are common pitfalls of overly broad sanctions. While potentially useful as a scalpel, sanctions are too