Economic Sanctions to Achieve
U.S. Foreign Policy Goals:
Discussion and Guide to Current Law



Both the Congress and the President in recent years have increasingly relied on economic sanctions as a means to establish and promote their foreign policy objectives. The 105th Congress currently has under consideration legislation relating to the procedure for drafting new sanctions regimes, as well as religious persecution, proliferation of weapons of mass destruction, conventional arms sales and transfers, export controls, terrorism, international narcotics control, travel restrictions, environment, workers rights (including issues of prison or forced labor and child labor), humanitarian donations of food and medicine, war crimes, torture, and human rights. Legislative initiatives to address particular countries' behavior -- most recently Iran, Libya, Iraq, Cuba, Sudan, China, Burma, and Russia -- have been debated frequently throughout government and the business community, both in the United States and in international fora. Sanctions to promote foreign policy objectives have been offered regularly during the consideration of annual appropriations bills and authorization measures.

This report provides background on the range of actions that might be termed sanctions, and a set of criteria that legislators might consider when proposing them, to help legislators judge when sanctions might be appropriate and the approach that might be the most effective. Provided as well is an uncomplicated "map" of where sanctions policies and options currently may be found in U.S. Iaw.

Defining Economic Sanctions

Generally, economic sanctions might be defined as "coercive economic measures taken against one or more countries to force a change in policies, or at least to demonstrate a country's opinion about the other's policies."1 The most-often quoted study on sanctions defines the term as "...the deliberate, government-inspired withdrawal, or threat of withdrawal, of customary trade or financial relations."2 Economic sanctions typically include measures such as trade embargoes; restrictions on particular exports or imports; denial of foreign assistance, loans, and investments; or control of foreign assets and economic transactions that involve U. S. citizens or businesses. These definitions of economic sanctions would exclude diplomatic demarches, reductions in embassy staff or closing of embassies, mobilizing armed forces or going to war -- tools clearly intended to change another country's behavior through other than economic means. The use of "carrots" (e.g., granting most favored-nation status for another year or offering economic or military assistance to a country if it conforms to certain standards) would not qualify as a sanction.

Issues Related to Economic Sanctions

In any sanctions debate, one might consider the following questions to assess the benefits and/or costs of imposing sanctions against a country, company, or individual:

Why do we apply sanctions? Economic sanctions are used when one country (or alliance of countries) wants to condemn or coerce change in the behavior of another country -- its government, individuals, or businesses -- that violates important international standards or threaten national interests. The U.S. government might impose sanctions when other efforts to change behavior have failed, such as diplomacy, public suasion, cultural and scientific exchanges, state visits, targeted technical assistance, military training and education, or other friendly means. Sanctions might be positioned at the middle of a continuum, between the extremes of complete cooperation and agreement at one end, and to the other end open hostility, use of force, or all-out war. The United States has aimed sanctions at governments that consistently violate internationally recognized human rights; at governments that sponsor international terrorism or harbor terrorists from elsewhere; at governments, individuals or corporations that engage in the proliferation of weapons of mass destruction; at individuals or governments that traffic narcotics; at governments that conduct aggression against their neighbors, threaten regional stability, or threaten U.S. security or foreign policy interests.

What objectives does the U.S. government seek to achieve when it imposes sanctions? United States policymakers do not always state the goals or objectives they hope to accomplish through the imposition of economic sanctions. Sanctions might be imposed when taking no action seems not enough of a response, but at the same time policymakers might resist committing to stronger measures. Generally, however, the U.S. government may choose to impose sanctions to:

Who imposes sanctions? The President has broad authority to impose sanctions, either pursuant to declaring a national emergency and then invoking powers vested in his office in the International Emergency Economic Powers Act, or by exercising authority stated in various Public Laws (some of which are described at the end of this report). In other instances, Congress might take the lead, either by conferring new Presidential authority to impose sanctions, or by requiring sanctions to be imposed unless the President determines and certifies that certain conditions have been met. Some sanctions are mandatory and are triggered automatically when certain conditions exist. Congress, for example, has required the imposition of sanctions when duly elected governments are overthrown by military coup d'etat, or when any non-nuclear weapon state explodes a nuclear device. Some behavior that would trigger the imposition of sanctions, such as proliferation or support of international terrorism, requires that the President or Secretary of State determine and certify that a violation of a standard has occurred. The Administration has considerable flexibility in making such determinations and also has the authority to waive sanctions when imposed.

What tools are available? All of the following economic policy tools have been used at one time or another, triggered by a variety of repugnant behaviors. 3

How likely is it that sanctions will achieve the stated goal? Effectiveness is the most difficult aspect of sanctions policy to evaluate. The impact, cost and benefit of sanctions cannot be considered in a vacuum. A recent study considers geographic proximity, common language, volume of trade, a country's relative wealth, and membership in a common trading bloc all factors that might determine the success or failure of a unilaterally imposed sanctions regime. 4 One should also consider the United States' relative importance -- in terms of trade, culture, scientific and intellectual exchanges, and history -- to the targeted country. How important to the targeted country is our economic cooperation? Is the United States a significant trading partner, or only marginally engaged? Consider, for example, that at the time that sanctions were imposed against the former Yugoslavia, the United States took in only about 5 percent of that country's exports. The support of more substantial trading partners in Europe was needed to have any hope of having an impact.

United States businesses frequently argue that U.S. sanctions that hinder their exports or imports in turn benefit their foreign competitors. Some contend that staying engaged as trading partners or investors in a problem country will have better long-term effect. The United States seeks to isolate Cuba, for example, while Cuba's European trading partners contend that full trade relations afford them opportunities to discuss human rights concerns with the island nation.

Of course, relatively modest goals that do not challenge the vital interests of the targeted country or person are more likely to be achieved than are far-reaching goals, such as a change in the form of government, change in its leadership, or relinquishing territory. The smaller the goal, the more likely it can be achieved. Similarly, the lesser the cost of imposing sanctions, the more sellable and manageable the policy will be to the implementing country or alliance of countries.

What secondary consequences might sanctions have? Whether or not successful in achieving their central purpose, sanctions sometimes have undesirable -- perhaps unexpected -- fallout. Sanctions against former Yugoslavia, for example, were particularly hard on the economies of Serbia's neighboring states. At the same time, some analysts argue, sanctions against Serbia and Montenegro actually bolstered nationalist political movements there. In another instance, long-standing sanctions against South Africa in the 1980s, some speculate, led that nation to develop weapons manufacturing capabilities -- conventional and nuclear -- that remain cause for concern today. Most recently, when the United States campaigned for European friends to join in sanctions against Iran by blocking investment in Iran's oil fields in 1995, for example, nearly all of Europe declined, pointing out that they were running out of fuel sources that were not under some sanctions regime. A short while later, trading partners of Nigeria found themselves wanting to punish that country for human rights issues but were unable to restrict trade with yet another oil producer.

Other secondary -- and unintended -- consequences arise in nearly all cases where sanctions are applied for some duration. Analysts express concern for the impact on the non-governmental population, particularly if food, medicine, or other basic human needs are affected. A recent study of the impact of U.S. sanctions policy on health and nutrition in Cuba concluded that U.S. restrictions on that country's ability to import food and medicine has "dramatically harmed the health and nutrition of large numbers of ordinary Cuban citizens."5 The State Department has countered these charges, incidentally, with documentation of increased humanitarian shipments of medicine and other health-related supplies to Cuba from the United States in recent years, and with statistics that indict the Cuban government for misuse of their own treasury and inattention to its own people. Indeed, the State Department reports that the United States, since 1992, has become the largest donor of humanitarian assistance to Cuba.6 Similar reports abound regarding Iraq and the impact of U.N. sponsored multilateral sanctions, with those supporting sanctions and those favoring lifting the sanctions for humanitarian reasons arguing equally passionately.

Nearer to home, loss of trade, the impact on U.S. jobs, potential loss of procurement contracts or other trade relations, loss of confidence in the reliability of American suppliers subject to unilateral economic prohibitions, all need to be factored in. How do such costs compare to the benefit of achieving the stated goal?

What change is required for the sanctions to be lifted? When sanctions are imposed via enactment of public law, what is required to terminate the restrictions is usually clearly stated. If a policy is unevenly applied, however, the standard might be less clear. China, for example, as a nonmarket economy, is denied permanent most favored nation status on the basis of laws relating to trade, nonmarket economies, and emigration. The annual debate to renew China's MFN status, however, rarely has much to do with freedom of emigration of China's population. If sanctions are applied for a lengthy period, other problems arise, or the circumstances that triggered the sanctions at the outset might evolve. The sought after change in behavior could be redefined over time, or multilateral or domestic support for the sanctions could deteriorate. In some instances, sanctions are imposed to achieve a goal that is unclear, ever-changing, or perhaps unattainable. In such circumstances, if the sanctions are lifted or waived, it may effectively signal a friendly change of policy. If the U.S. government terminates sanctions when it appears that the targeted country has not budged at all from its sanctionable behavior, however, future attempts to achieve a standard of behavior through sanctions may be compromised. The constantly changing political landscape of the former Yugoslavia over the last seven years provides numerous incidents to demonstrate the dilemma of sending confusing signals to allies as well as the sanctioned state.

Would multilateral sanctions be more desirable and achievable? It is generally agreed that sanctions imposed by all or most of the nations on which a targeted country relies for trade and support (such as through the United Nations or other multinational organization) stand a much better chance of having an impact than unilateral restrictions or prohibitions. Consensus is difficult to reach among countries considering another country's behavior, however, and as a result multilateral sanctions are imposed infrequently. Comprehensive multilateral sanctions are even more rare. Attempts that fail to solidify international opinion against one country's objectionable behavior can actually give support to those committing the behavior (for example, every year the United States is condemned by the U.N. General Assembly for its unilateral sanctions regime against Cuba).


Back to Table of Contents

Next Section


Home |  About Us |  Resources |  Press Releases |  Federal Activity & Legislation
State & Local Activity |  NFTC Lawsuit |  Contact Us |  Site Index