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In the Hot Topic panel on Economic Sanctions, Kristen Boon moderated a panel of questions for Daniel Glaser, Justyna Gudzowska, Katherine Shepherd and David Stetson.
First, the panel attempted to characterize targeted sanctions. Targeted sanctions mark an evolution over the past two decades in contrast to embargoes against nations, which can have the effect of hurting everyone in a nation, perhaps even more so than the “bad actors.” Targeted sanctions can instead be applied to groups or individuals by their status (for example, political leaders in a nation) or it can focus on conduct (for example, anyone engaged in the smuggling of antiquities from Syria).
Both Daniel and Katherine noted that status based sanctions might more easily be defensible in a court of law, particularly in the EU, because it may be easier to produce sufficient information. This point was critical for Katherine, who mentioned that during the implementation phase of a sanctions regime, the EU authority responsible for defending a person’s listing is not the authority who designates the listing. Defending the listing requires relying upon the rationale provided by the designating authority, such as the UN.
The coordination between the UN and member states was a specific question posed by the moderator. Justyna explained that any member state may propose a listing, which is then deliberated by the Security Council. Many countries do not have effective regimes in place to implement the sanctions, although David mentioned that in practical purposes, industry will effect a “most common denominator” standard to apply sanctions in a manner across jurisdictions.
For this reason, the lack of UN sanctions against Russia suffers from a political perspective, but not an economic one. While many panelists would prefer to see buy-in from the UN on this issue, uniformity and consensus among the US and EU also offered a strong signaling device that these two regions opposed to 2014 Russian actions in the Crimea. Katherine also mentioned that the US and EU gained flexibility with a tighter subgroup of actors.
The related issues of flexibility, “over-compliance,” and fine-tuning brought up some of the unresolved areas in economic sanctions. Many of the panelists noted that sanctions require some level of clarity so that businesses and banks can continue doing business, or at least gauge the level of risk accurately. They also argued that the sanctions are preventative: the purpose is not to punish the actors or to bankrupt them, but instead to freeze assets so they will not be used in a way that violates the purpose of the sanction. Sanctions can be lifted and the assets unfrozen for the owner’s use.
Considering the panel was a “Hot Topic” Kristen posed a question about Iran, but the consensus was too little was known about how sanctions there might thaw. David surmised the private sector may be cautious for a while.
Ryan Harrington is the Head of Reference at the Yale Law Library.