Author: Michael Galant
CEPR has updated its Frequently Asked Questions report on US sanctions policy, which provides an overview of unilateral US economic sanctions, their legality under international law, and their economic and humanitarian effects in countries such as Afghanistan, Cuba, North Korea, and Venezuela.
Economic sanctions have become a go-to instrument of US foreign policy, but this explosion in economic coercion has taken place with little discussion of the enormous human cost. A growing body of evidence makes clear that broad, unilateral sanctions substantially harm — and often kill — innocent people around the world.
The following resource is intended to aid policymakers and advocates in understanding US sanctions policy and its lethal and humanitarian consequences. This guide focuses primarily on broad economic sanctions imposed unilaterally by the United States and is not comprehensive with respect to all forms of sanctions globally. For a quick summary, see CEPR’s “The Case Against Economic Sanctions” fact sheet.
For news and updates regarding US sanctions policy — and its deadly impact around the world — follow CEPR’s Sanctions Watch monthly news bulletin.
What Are Economic Sanctions?
The word “sanctions” is used to refer to a broad range of coercive policies imposed by governments or multilateral organizations to constrain the activities of foreign nations, entities, or individuals. Economic sanctions vary widely in scope and form, from restrictions on travel to export controls to bans on trade or transactions, from measures targeting individuals to those applied to entire countries, and from policies imposed by a single nation to regimes agreed to by multilateral bodies like the UN.
This resource primarily uses “sanction” to refer to broader economic restrictions that target or significantly affect the overall economy of other nations through limits on trade and finance. In this FAQ, we focus on sanctions imposed unilaterally by the United States, which deploys far more sanctions than any other country and has unique leverage within the global financial system.
In terms of regulatory scope, US sanctions can generally be classified as comprehensive — banning all or most economic activity, including financial transactions, exports, and imports, with entire countries, such as Cuba, Iran, North Korea, Syria, or subnational regions like Donetsk and Luhansk; sectoral — prohibiting certain forms of engagement with particular sectors within a targeted economy; or list-based (i.e., individual or entity sanctions) — prohibiting transactions with or blocking the assets of certain companies, organizations, or individuals placed on a federal sanctions list (primarily, the Specially Designated Nationals and Blocked Persons List). While list-based sanctions are sometimes referred to as “targeted” or “smart” sanctions, their effects can be quite far-reaching, as discussed below.
In general, these prohibitions apply to transactions with a “US nexus” — that is, those involving a US person, US products, or activity on US soil. In addition to these primary sanctions, secondary sanctions are those applied to third parties — neither US citizens nor the targets of primary sanctions — to penalize engagement with the primary target.
For example, a foreign financial institution that transacts with an Iranian petroleum company may itself be sanctioned under the US’s Iran sanctions program. In this way, US sanctions regimes, leveraging the dominant role of the US in the global financial system, can be extended well beyond financial and commercial activities involving US-based individuals and companies and can have a substantial and harmful impact on people, businesses, and countries even when they are not the primary target of the sanctions.
