Smarter 'Smart' Sanctions
20 Pages Posted: 15 May 2008
Economic and financial sanctions, whether aimed at countries such as Iran or North Korea or more amorphous targets like weapons proliferators, narco-traffickers, and global terrorists, are increasingly important tools for governments attempting to address some of the more intractable international issues of the late 20th and early 21st centuries. As documented by the British House of Lords Economic Affairs Committee's Inquiry into the Impact of Targeted Sanctions in 2007, the Swedish Institute of International Law's Report to the Swedish Foreign Office on Legal Safeguards and Targeted Sanctions in 2002, and the congressionally created Judicial Review Commission on Foreign Asset Control's Final Report to Congress in 2001, the governmental blacklisting of particular entities or individuals that lies at the heart of what are now called "smart" or "targeted" sanctions programs is beset with numerous issues that undermine compliance and impacts the perceived legitimacy of these programs.
Uncertainty regarding the details of the controls, the obligations they impose, and the manner of their enforcement, is the single greatest impediment to the types of commercially practicable sanctions that would lead to more widespread voluntary compliance. Governments need to do more to design their sanctions programs with commercial practicality in mind, and businesses and others in the regulated community need to work more closely with government to ensure that these programs are workable and capable of achieving their stated objectives.
Keywords: economic sanctions, blacklisting, international trade, terrorism, due process
JEL Classification: D80, F02, F10, F23, H87, K20, K40, K42, N40, N70
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