Earlier this month SUSRIS provided an exclusive interview with U.S. Assistant Secretary of State for Economic and Business Affairs Jose Fernandez in which he talked about the economic component of Saudi-US relations. Among the many areas of responsibility in the State Department bureau under his direction is the issue of international sanctions. We recently noted Mr. Sanchez’ remarks on the subject of sanctions, specifically those in place against Iran as the United States, along with Saudi Arabia and other allies, step up pressure on Tehran over its nuclear program. He spoke to the Sanctions Subcommittee of the Advisory Committee on International Economic Policy in Washington on April 11, 2012. SUSRIS provides his presentation today for your consideration. We suggest you review the recent SUSRIS articles addressing the challenge of Iran policymaking on the US and Saudi decisionmakers. [Links follow below]
“Iran remains one of our greatest foreign policy challenges, and our Iran sanctions regimes are one of our greatest tools in pressuring Iran to comply with its international obligations.”
Asst Sec of State Jose W. Fernandez
You know, I spend a lot of time doing very positive work in a number of areas at the State Department. One area we focus on in the Bureau of Economic and Business affairs is economic sanctions, which I know can sometimes be viewed as “the dark side” of our work. We have many carrots at our disposal, but sanctions work is our big stick. But the message that I want all of you to walk away with today is that sanctions regimes can be an effective way to promote some very positive changes around the world.
I will begin my remarks with a brief description of some of the goals and work of our sanctions team, some of whom are here to help answer your more difficult questions, before I present you with a few case studies on sanctions, and I will conclude with how we see our work going forward.
However, I am particularly interested in hearing from you. I’d like to hear your thoughts on the role you envision for U.S. sanctions regimes in our overall economic tradecraft and our message to the business community, so I encourage you to present any ideas or questions you may have at the end of my comments.
THE WORK OF THE SANCTIONS TEAM AT STATE
Sanctions are a foreign policy tool somewhere between hard and soft power, which can play a significant role in encouraging bad actors to change their behavior. Under the Obama Administration, sanctions have proven to be one of our most effective means of increasing pressure on rogue actors and regimes without resorting to force.
Secretary Clinton has noted that one of our country’s great challenges is advancing our global leadership at a time when power is often measured and exercised in economic terms. Our sanctions regimes are a critical part of our economic outreach, and we envision an economic foreign policy in which promotion of business development meshes seamlessly with sanctions that simultaneously encourage our global partners to focus on responsible, innovative markets and isolate the world’s worst human rights abusers and weapons proliferators.
Additionally, the Department has been ramping up its focus on making our sanctions regimes as strong and effective as possible. Given the horrific events occurring in Iran and Syria over the past couple years, these improvements to our sanctions protocol are timely, and in sync with the Administration’s commitment to using sanctions in the most effective manner possible.
In light of this new focus, we have been expanding our sanctions team, adding six more people and bringing in a new Deputy assistant Secretary to focus wholly on our sanctions programs. We are aiming for a re-vamped sanctions Deputate by mid-summer.
Already, our economic sanctions experts are in constant contact with others at the State Department who also play a key role in sanctions policy, including our colleagues focused on non-proliferation, counter-terrorism, and human rights, and those on our country desks who coordinate our overall relationship with a country. Through this interaction, we ensure that our sanctions policies are focused in the right way so as to maximize their impact.
We hope that these changes will allow the State Department to coordinate more effectively with other agencies to wield targeted sanctions and other economic pressure against our adversaries.
Wherever possible, we have attempted to target our sanctions on individuals and entities within a country directly engaged in the activities that we seek to change. These targeted sanctions are sometimes referred to as “smart sanctions.” In doing so, we seek to make it clear that we are not targeting the population of a country but rather those in control who can stop the bad behavior of a particular regime.
CASE STUDY: LIBYA
Libya is an example of when sanctions can be most effective: in environments of international cooperation. When the international community cooperates on sanctions, targeted entities have a harder time avoiding them and the likelihood of success in effecting desired changes increases. These sanctions, in combination with an effective military pressure and support for Libyan rebel forces provided by the international coalition, helped isolate the Qadhafi regime, resulting in the regime’s ultimate downfall.
I will be traveling to Libya in a week’s time, and I will get a better sense of lessons learned from our sanctions regime while I am there.
As you all know, both the Administration and the international community have now passed measures that significantly ease sanctions on Libya. Though final winding down of the Libyan sanctions programs may take some additional time, this is a good example of how sanctions regimes can change over time based on the goals of each sanctions program and the situation on the ground.
CASE STUDY: BURMA
Although challenges remain, the Burmese Government has taken some positive steps toward democratization and civic openness since Than Sein became President in 2011. During her trip to Burma in December 2011, Secretary Clinton announced an “action-for-action” strategy to encourage reformers to take further steps.
As a result of Burma’s successful by-elections on April 1, Secretary Clinton announced on April 4 a series of steps that the United States is prepared to take as part of our action-for-action strategy.
Among steps on the sanctions front, these include a broad exemption from our Burma sanctions for a wide spectrum of non-profit activities.
This will make it much easier for U.S. entities and individuals to build schools, clinics, libraries, and other institutions in Burma. U.S. citizens will also be authorized to set up university exchange programs, public health initiatives, conservation projects and a host of other activities that will benefit the Burmese people.
This step is in line with the Secretary’s commitment during her visit to Burma to increase exchanges with the people, civil society organizations, and government.
We will also begin the process of a targeted easing of our ban on the export of U.S. financial services and investment, as part of a broader effort to help accelerate economic and political reform.
Our aim will be to recognize the reforms underway and take actions that assist the country’s development and reform process. We will work closely with our allies and counterparts, including within our own government, to coordinate these changes.
CASE STUDY: SYRIA
Syria presents another example of international coordination. As it became clear that President Assad was not going to lead a democratic transition, and as the violence against the Syrian people increased, we felt it necessary to coordinate a strong international response.
We have worked systematically to increase our own pressures, including tough targeted sanctions against the Assad regime. At the same time, in literally hundreds of meetings and conversations, President Obama, Secretary Clinton, senior officials, our ambassadors, and others have steadily and systematically worked to build concerted international pressure.
Our aim was to build a strong international effort in support of the universal rights of the Syrian people, and to condemn and isolate the Assad regime. We recognized from the start that American leadership was crucial to this effort, but to have maximum impact in Syria, we wanted to lead the chorus of voices and pressures, not just make this a solo act.
This coordination led to similar actions by our partners and allies around the world, such as the EU and Canada, to isolate the Government of Syria from the international financial system and deprive it access to significant revenue streams that are generated by its petroleum sector.
Syria continues to pose challenges, and we continue to look at ways in coordination with our international partners to increase pressure on the Syrian regime. Again, this dire situation requires a chorus, not a solo.
CASE STUDY: IRAN
We and others in the Administration and in Congress are always looking at new ways to further increase pressure on the worst regimes. We are especially focused now on additional measures to take against Iran and Syria. In any deliberations, we look to leverage the best possible outcome in line with U.S. foreign policy goals.
Our multifaceted approach to Economic Statecraft presents many opportunities for businesses around the world to grow and prosper working with the United States, while simultaneously staking a strong position, along with our global partners, that it cannot be business-as-usual with states that ignore the international community, flaunt illicit nuclear development, and commit terrible abuses on their own people. On sanctions, the United States is dedicated to a leadership role in developing a responsible and innovative global economic policy.
I welcome any questions or comments you may have, and my team is here to assist when things get very technical.
Source: US State Department
Source: U.S. State Dept.
- Critical Commercial and Economic Ties: A Conversation with Jose Fernandez – SUSRIS – Apr 3, 2012
- Advisory Committee on International Economic Policy: Sanctions Subcommittee
- Challenge of Iran – 2012 – SUSRIS Special Section
- AUSPC Panel – Geo-Political Dynamics: The Iran Conundrum – Thomas Delare – SUSRIS – Oct 25, 2010
- US, Saudi, GCC Leaders to Talk on Iran, Syria Crisis – SUSRIS – Mar 29, 2012
- Reacting to War Drums in the Gulf: A Conversation with James Russell – SUSRIS Exclusive Interview – Mar 28, 2012
- Understanding the Military Equation in the Gulf – SUSRIS – Feb 26, 2012
- Saudi Arabia in a Post “Arab Spring” Environment: Obaid – SUSRIS – Feb 14, 2012
- Confronting a “New Middle East”: A Conversation with F. Gregory Gause – SUSRIS – Feb 13, 2012
- Business Forum: Ambassadors Exchange Views – The Saudi Side – SUSRIS – Feb 1, 2012
- Saudi Oil 30-Year Output High Amid Gulf Tensions – SUSRISblog – Jan 24, 2012
- Change is the Only Constant – Prince Turki – SUSRIS – Jan 2, 2012