This essay is part of the Brennan Center’s series exploring new approaches to national security 20 years after 9/11.
For the U.S. government, sanctions are an attractive response to a wide range of foreign policy problems. Support for international terrorism? Sanctions. Interference in U.S. elections? Sanctions. Narcotics trafficking? Sanctions. As Deputy Secretary Treasury Wally Adeyemo recently admitted, sanctions have become America’s “tool of first resort.”
But as the use of sanctions has increased, so, too, have questions about U.S. reliance on them. To be sure, sanctions tend to be less costly in both money and lives than military action, but that doesn’t mean that they are cost-free on either count. Over the past two decades, it has become increasingly clear that sanctions can cause significant damage both at home and abroad — often with little countervailing benefit to U.S. interests.
Moreover, Congress’s broad delegation of sanctions authority to the president makes it nearly impossible for lawmakers to terminate sanctions regimes that are ill-conceived or ineffective. A principled sanctions policy will require significant changes in the law to mitigate harms to innocent civilians abroad, protect constitutional rights at home, and recalibrate the balance of power between Congress and the executive.
IEEPA: Congressional intent versus reality
Most U.S. sanctions regimes are imposed by the president, not by Congress, under the International Emergency Economic Powers Act (IEEPA). Even when Congress creates sanctions programs, it generally does so by directing the president to take action under IEEPA. This law allows the president to declare a national emergency with respect to any “unusual or extraordinary threat” to national security, foreign policy, or the economy, as long as that threat has its source in “substantial part” from overseas. The government can then take sweeping economic action to address that threat. When it designates someone as a target of IEEPA sanctions, the government can freeze any assets of the target that come within U.S. jurisdiction, and it can prohibit any person or entity under U.S. jurisdiction from transacting with the target.
When Congress passed IEEPA in 1977, it was with the expectation that national emergencies requiring peacetime sanctions programs would be “rare and brief” and would not be “equated with normal ongoing problems.” The precipitating events would be ones that truly represented a threat to the United States. The president would report regularly to Congress on the use of sanctions, and if Congress felt that the executive branch was misusing the statute’s powers, it could terminate the emergency declaration and any sanctions by legislative veto — a law that goes into effect without the president’s signature.
None of this holds true today. IEEPA has become a routine instrument of foreign policy, invoked 65 times since the law’s enactment. Sanctions programs regularly last for years or even decades. The president’s reports to Congress are cursory, pro forma documents that give Congress no meaningful basis to evaluate the sanctions’ effectiveness. And in 1983, the Supreme Court held that legislative vetoes are unconstitutional; to terminate sanctions, Congress must pass a law that the president signs — or muster a supermajority to override the president’s veto. Today, the United States has over two dozen sanctions regimes in place, with thousands of people and entities targeted under them.
The humanitarian costs of sanctions
This heavy reliance on sanctions reflects a widely held view that sanctions are a relatively costless alternative to military engagement. As the United States attempts to disentangle itself from its post-9/11 military ventures, the appeal of sanctions will only increase. As one observer put it, sanctions are “sharper than talking, but gentler than military action.”
It is true that sanctions are cheaper, financially, than warfare—at least for the U.S. government, which merely has to identify and announce the targets. The burden then falls to the private sector, which must ensure it is not transacting with sanctioned persons or entities. The government does incur costs for enforcement, but at least some of these are recouped through fines imposed on U.S. companies and individuals who are found to have violated sanctions.
Nonetheless, viewing sanctions as a low-cost alternative to warfare is misguided. There is a growing body of evidence that sanctions can impose severe humanitarian costs on innocent civilian populations overseas. Studies show that sanctions have wreaked significant harm in Cuba, Venezuela, Iran, and Syria, leading to adverse health impacts like malnutrition and increased infant mortality. Targeted sanctions, such as those imposed on human rights offenders under the Global Magnitsky Act, more easily avoid such collateral damage. But comprehensive sanctions programs—those that target entire countries or governments—can be devastating; some have labeled them “financial carpet bombing.” By one estimate, there have been tens of thousands of deaths due to sanctions.
The U.S. government often grants licenses to enable the provision of humanitarian aid to areas affected by sanctions. But these licenses can be narrow in their conception of humanitarian assistance — for instance, by not including civilian energy infrastructure — and delayed in implementation. Moreover, because the penalties for violating sanctions are so immense, the private sector routinely “over-complies” with sanctions and shies away from transacting with targets even when a license is granted. A recent U.S. Government Accountability Office report on Venezuela sanctions found that all nine of the U.S. Agency for International Development implementing partners in that country had banks close their accounts or reject transactions, despite being permitted to deliver humanitarian aid.
The costs we pay at home
Although sanctions targets are overwhelmingly foreign, U.S. citizens and organizations may be targeted if the government decides they are contributing to the foreign threat. As a practical matter, a person within the United States who is sanctioned cannot rent an apartment, buy food, pay for medical care, or hold a job without the permission of the government. This draconian action can be implemented by mid-level Treasury Department officials without anything resembling what most of us would consider “due process.” Targets are given no notice and are not entitled to see the evidence against them. They can attempt to get relief in court, but such challenges rarely prevail because the law requires courts to grant substantial deference to the executive branch.
The lack of procedural protections increases the likelihood of error, sometimes with ruinous consequences. In the aftermath of the 9/11 attacks, the government designated several Muslim American individuals and charitable organizations as part of a campaign to demonstrate the nation’s commitment to fighting terrorism. According to government officials interviewed by the 9/11 Commission, “some of the evidentiary foundations for the early designations were quite weak.” The targeted individuals lived in a precarious and terrifying limbo for several months before the government withdrew the designations for lack of evidence. Many charities were forced to shut down without the government ever having to prove that their contributions benefited terrorists.
There is also a financial cost. Although sanctions are cheap for the U.S. government, U.S. businesses must expend significant resources on ensuring compliance, as well as pay often hefty fees for failures to comply, even when those failures are inadvertent. Moreover, the inability to operate in certain areas can have serious impacts on U.S. companies’ revenue. We do not know the full extent of sanctions’ impact on the U.S. economy because the government is under no obligation to measure it.
Building a better system for sanctions
It is far from clear whether sanctions reliably produce any benefit, let alone one that is sufficient to outweigh the downsides. It may intuitively seem that a sanctioned government would change its ways in order to access funds and avoid losing power as the citizenry turns against it. But in some cases, the reverse happens. In autocratic regimes, sanctions can benefit rulers because they make the general public’s access to goods dependent on those in power. At the same time, these regimes can plausibly blame shortcomings in their countries on the sanctions, rather than face consequences for their own failures. Sanctions also can push countries towards alliances with other autocratic regimes that will help them evade the impacts. By some measures, coercive sanctions result in meaningful changes in state behavior less than 50 percent of the time.
In any event, the U.S. government is not required to produce the information that Congress would need to perform a thorough cost-benefit analysis. Such information would include assessments of sanctions’ humanitarian impacts, costs to the U.S. economy, and measures of progress against goals.
Fortunately, the tide may be turning. Various developments have brought public scrutiny to the issue, including President Trump’s actual and threatened use of sanctions powers in novel ways, as well as the highly visible ways that sanctions have interfered with some countries’ responses to Covid-19. Politicians, civil society, and the media are all discussing the need for sanctions reform.
The Brennan Center has proposed a number of commonsense reforms to IEEPA that would improve the way sanctions are deployed and controlled. Our recommendations would include due process protections for Americans and others in this country who are swept up in sanctions and a broader humanitarian exception that is more difficult for the president to waive. We also call for additional transparency with respect to sanctions’ implementation and effects and a requirement of periodic congressional approval for any sanctions regime to remain in place.
The Treasury Department is currently engaged in what it describes as a “top to bottom review of U.S. economic and financial sanctions.” Deputy Treasury Secretary Adeyemo has stated that the goal is to make sure that sanctions “remain a strong, viable option for policy makers in the years and decades to come.”
For that to happen, there needs to be a significant shift in how sanctions are used. Meaningful improvement of sanctions will require not only more thoughtful application by the executive, but also significant reform by Congress to ensure that reforms are binding on future administrations as well.