Managing Smart Sanctions Against Terrorism Wisely

Abstract

Economic sanctions, tools that seek to deprive terrorist organizations of the financial ability to support and conduct operations such as the attacks on Washington and New York, are among the U.S. government's most powerful weapons in the war on terrorism. Sanctions greatly expand the reach of the government's own anti-terrorism efforts, by effectively enlisting the aid of the financial and trading communities in identifying and blocking access to assets belonging to terrorist organizations and their supporters. However, there is a significant difference between simply serving political goals by announcing sanctions, and promulgating controls that are actually effective in combating terrorism. Given the new appreciation of the very real need to deprive terrorist of the ability to finance attacks like those that occurred late last year, one might ask how these controls can be made more practical and effective in the ongoing war on terrorism than they evidently proved to be in the past?

The manner in which sanctions programs are actually implemented and administered has immediate and practical consequences. The importance of enlisting non-govermnental parties in the war on terrorism, for example in foreclosing the terrorists' ability to move or launder funds through unofficial channels such as the hawalu or hundi money networks, is now more clear than ever but the devil is in the details. If these programs are not properly implemented, the government's objectives may be undermined or frustrated. Similarly, the burdens imposed on those who seek to comply in good faith with the government's policies may be unnecessarily increased if the regulatory controls are not properly crafted and administered. This paper attempts to show how those burdens can be eased while simultaneously making the governmental controls more effective.

Keywords: economic sanctions, due process, compliance, , terrorism, international trade

JEL Classification: D80, F02, F10, F23, H87, K20, K33, K42, N40, N70