New Sanctions for a New Century: Treasury's Innovative Use of Financial Sanctions
University of Pennsylvania Journal of International Law, Vol. 30, pp. 789-822, 2009
34 Pages Posted: 17 May 2010
Date Written: May 10, 2009
The U.S. Treasury Department's conduct-based, intelligence-grounded, targeted financial sanctions have thus far proven to be among the twenty-first century's most effective and important new counterterrorism and counterproliferation tools. The imposition of such sanctions on Iran has resulted in more than eighty banks around the world, including most of the world's top financial institutions, curtailing business with Iran.
The Treasury Department's financial sanctions strategy against Iran includes several innovations that seem highly likely to impact the design of future sanctions against other targets. These include direct outreach to individual foreign private financial institutions, the aggressive use of financial authorities to pursue political goals, and the effective development and harnessing of intelligence about global financial transactions.
Although this novel breed of financial sanctions was designed and first implemented under the administration of George W. Bush, the Obama Administration cast a vote of confidence in it, including by taking the extraordinary decision to retain in place Stuart Levey, the Bush-appointed Under Secretary of the Treasury who is principally known as the leading architect of these financial sanctions. The decision to retain Levey is both a vote of confidence in this novel breed of financial sanctions and an indication that their design is likely to have a strong influence on any Obama Administration efforts to increase the range and impact of sanctions on Iran or other rogue states.
This Article analyzes the motivation, design, implementation, impact, and future prospects for this new breed of financial sanctions. The Article also identifies and analyze the several innovative aspects of these sanctions that seem highly likely to be replicated in the design of a wide range of future sanctions against other targets.
Keywords: Iran, sanctions, nuclear, nonproliferation, counterproliferation
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