November 27, 2024
In this edition of Sanctions Watch, covering November 2024:
- Afghanistan frozen asset fund has made no disbursements despite need;
- Rubio nomination may spell disaster for crisis-wracked Cuba;
- Trump reportedly plans to intensify “maximum pressure” approach to Iran;
- UN Security Council divided over condemnation, sanctions following North Korea missile tests;
- Russia’s largest remaining unsanctioned bank is targeted by the US;
- US sanctions Syria conglomerate over alleged Iran ties;
- House passes BOLIVAR Act, which would codify certain Venezuela sanctions;
- Trump admin. appears set to ramp up sanctions, undermining stated priority of decreasing migration, and more.
Afghanistan (background)
The US Special Inspector General for Afghanistan Reconstruction’s latest congressionally mandated report states that the Afghan Fund — a Switzerland-based organization created with US backing to hold and disburse, “for the benefit of the Afghan people,” half of the $7 billion in Afghan central bank assets frozen by the United States — has yet to make any disbursements more than two years after its creation. This comes as Bloomberg reports:
The Taliban-led government in Afghanistan said it wants a fresh start with the US under President-elect Donald Trump and secure long-sought access to more than $9 billion of the nation’s foreign exchange reserves seized three years ago. … The funds would be a huge relief for the cash-strapped Taliban, which has been battling to rebuild an economy devastated by sanctions and the loss of international aid.
Dr. William Byrd, Afghanistan senior expert at the US Institute of Peace, noted this month that countries could support Afghanistan’s shrinking economy amid reductions in foreign aid and cash shipments “by facilitating production of more Afghani banknotes as needed and allowing investment income from the Afghan Fund in Switzerland (comprising part of Afghanistan’s frozen foreign exchange reserves) to be used for macroeconomic stabilization.”
Read more:
- Taliban Eyes Trump Reset with $9 Billion in Reserves at Stake, Bloomberg
- How Afghanistan’s Economy Can Survive Shrinking Shipments of U.N. Cash Aid, United States Institute of Peace
Cuba (background)
Early this month, as Cubans were still struggling to recover from October’s deadly Hurricane Oscar, the island was slammed by another powerful storm. Category 3 Hurricane Rafael destroyed hundreds of homes, damaged roads, and temporarily knocked out the country’s fragile electrical grid. Only days later, a 6.8 magnitude earthquake struck off the coast, causing further damage to housing and infrastructure and adding to the country’s humanitarian woes. President Lula da Silva of Brazil responded to the disasters by reiterating his calls “for the review and relaxation of unilateral sanctions that have been harming the country’s economic and social development for more than six decades.” The unilateral embargo is a major contributing factor to the vulnerability of the island’s infrastructure, particularly its ailing energy grid. Lula said the embargo “directly affects the living conditions of [Cuba’s] inhabitants and, in particular, of the most vulnerable sectors.”
Yet Cuba’s challenges may soon multiply. The election of Donald Trump — who in his previous administration reversed the Obama-era thaw in US-Cuba relations and designated Cuba a “State Sponsor of Terrorism” (SSOT) — and the nomination of Senator Marco Rubio (R-FL) — a leading proponent of the embargo — as secretary of state likely means an intensification of the “maximum pressure” approach the Biden administration inherited and maintained. As Carlos Trujillo, a former Trump administration ambassador to the OAS now rumored to likely be named assistant secretary of state for Latin American affairs, proudly declared: “If you look at what happened in Cuba, the total collapse of their economy was driven by the pressure that President Trump implemented.” Notably, Trump defeated Harris by 11 points in Miami-Dade County, where Cuban-Americans are the single biggest ethnic group. This result strongly suggests that the Biden administration’s attempts to attract hard-line Cuban-American voters by mimicking the Republican “maximum pressure” approach to Cuba was unsuccessful. A recent poll found that Cuba policy does not rank in the top five most important policy concerns of Cuban Americans in Miami-Dade County.
Noting Cuba’s ongoing humanitarian crisis and the unprecedented wave of migration it has spurred, 18 members of Congress wrote to President Biden this month urging him to use his remaining months in office to reverse the SSOT designation, ease sanctions, and expedite aid to the Cuban people.
Read more:
- Trump’s Hawkish Cabinet Pick Heightens Pressure on Weakened Cuba, Bloomberg
- When Lights Go Out in Cuba, Media Blame Communism—Not US Sanctions, Fairness & Accuracy in Reporting
- Representatives Lee, McGovern, Meeks, and Castro Lead Congressional Letter to President Biden Urging Sanctions Relief for Cuba Amid Humanitarian Crisis, Congresswoman Barbara Lee
- No Mojitos and No Lights: Cuba’s Tourism Industry Fights Losing Battle, Financial Times
Iran (background)
The Wall Street Journal reported this month that the incoming Trump administration plans to “increase sanctions on Iran and throttle its oil sales” soon after taking office. During his previous administration, Trump unilaterally withdrew from the 2015 Iran nuclear deal and reimposed sanctions that had been lifted under the agreement, even though the deal was, by all accounts, successfully limiting Iran’s nuclear capabilities. Despite campaign promises, President Biden failed to restore the deal, maintained most sanctions (though he has been accused of failing to fully enforce them), and drastically ratcheted up tensions by supplying weapons to Israel and by supporting its attacks in Gaza and against Iran and its allies.
Just days after the election, tech multibillionaire and current Trump advisor Elon Musk reportedly met with Iran’s UN ambassador, sparking speculation that Trump may seek to negotiate with Tehran. On November 22, Ali Larijani, a senior advisor to Iran’s Supreme Leader Ali Khamenei, floated the idea of working with the Trump administration on a new nuclear deal. In an interview posted on Khameini’s website, Larijani reportedly said: “You now have only two options: either return to the JCPOA that was already agreed upon … or, if you do not accept it as I have heard that the new US administration has said, then fine. It is not divine revelation. Come and discuss a new deal.” Despite these signs of support for dialogue, the nomination of hard-line regime change advocate Marco Rubio (R-FL) for secretary of state suggests that the incoming administration may favor an aggressive and escalatory approach rather than a diplomatic one.
Also this month, the European Union and the United Kingdom announced new sanctions on Iran over the alleged transfer of ballistic missiles to Russia. The sanctions target Iranian ports, vessels, and the state-owned Islamic Republic of Iran Shipping Line. Denying involvement, and pointing to the fact that Ukrainian president Volodymyr Zelenskyy said in October that no missiles had yet been delivered, the Iranian government called the escalation “unjustifiable.” Also this month, the United States imposed sanctions on 26 individuals, entities, and ships tied to a Syrian conglomerate allegedly involved in the transfer and sale of Iranian oil and the financing of the Islamic Revolutionary Guard Corps-Quds Force and Ansar Allah.
Read more:
- Trump to Renew ‘Maximum Pressure’ Campaign Against Iran, The Wall Street Journal
- Inside the Secret Oil Trade that Funds Iran’s Wars, The Economist
- Imposition of Sanctions on Iran’s Illicit Revenue-Generating Network, US Department of State
North Korea (background)
Following a series of North Korean ballistic missile tests in late October, South Korea announced new sanctions against 11 individuals and four entities allegedly linked to the missile program and the procurement of foreign exchange in Africa. Japan is also reportedly considering new sanctions, as is the lame-duck Biden administration.
Ten members of the UN Security Council, led by the United States, released a statement condemning the tests, while China, Russia, and others vetoed a Security Council formal resolution. Though China and Russia previously supported similar resolutions, they have increasingly wielded their vetoes in recent years, citing the United States’ unstrategic approach and refusal to address its own role in incentivizing North Korean nuclear ambitions. In the past few months, Russia has developed increasingly close ties to North Korea, in part over their shared experiences under US sanctions, with North Korea providing troops to support Russia’s war in Ukraine. Alex Gatopoulos wrote in Al Jazeera that North Korea has “had several poor harvests in a row and food is in scarce supply. It is also short of money to be used on the black market as bypassing international sanctions is expensive. Russia can help with all of this …”
President-elect Trump has not yet indicated what approach his incoming administration may take toward North Korea. Despite briefly pursuing a diplomatic agreement during his previous administration, talks soon fell through, reportedly in part over Trump’s unwillingness to significantly lift sanctions.
Read more:
- Seoul Sanctions North Korean Diplomats, Companies over Latest ICBM Launch, NK News
- North Korean Test of ICBM Is Condemned by Two-Thirds of UN Security Council, Associated Press
- North Korea May End Up Sending Putin 100,000 Troops for War, Bloomberg
Russia (background)
On November 21, the US imposed sanctions on over 50 small-to-medium internationally connected Russian banks, in addition to Gazprombank, which the Treasury Department describes as “Russia’s largest remaining non-designated bank.” Bloomberg reports that the bank had previously been exempt from penalties due to its key role in energy markets, particularly for European countries that continue to purchase Russian gas. The US also issued a major warning threatening secondary sanctions on third-country financial institutions that join SPFS, a Russian financial transfer system designed as an alternative to the SWIFT network that complies with US sanctions measures.
The United Kingdom has been especially active this month in imposing sanctions on Russia, with London issuing its largest sanctions package since May 2023, targeting 56 entities and individuals linked to “Russia’s military-industrial complex and Russian-backed mercenary groups,” according to an official statement. The UK also targeted 10 individuals and entities for allegedly supporting Russia’s “attempts to forcibly deport and indoctrinate Ukraine’s children,” a separate announcement said, as well as 30 vessels in Russia’s shadow fleet of oil tankers used to bypass existing sanctions. The EU, meanwhile, is reportedly preparing its 15th package of sanctions against Russia, expected to be issued in January, which might target foreign companies providing components found in Russian military equipment. Additionally, a separate, smaller package of EU sanctions aimed at Moscow’s shadow fleet is anticipated before the year’s end.
Sanctions continue to have a damaging impact on the Russian economy. “At first glance, the [economic] numbers look surprisingly strong,” write international relations lecturer Marc DeVore and finance professor Alexander Mertens in Foreign Policy, but “signs that the official data masks severe economic strains brought on by both war and sanctions have become increasingly apparent.” The Economist reported this month that “sanctions are sinking Russia’s flagship [Arctic LNG 2] gas project,” and Sovcomflot, Russia’s leading tanker company, said “that Western sanctions on Russian oil tankers were limiting its financial performance,” according to Reuters. Moreover, the threat of US secondary sanctions has reportedly prompted the Bank of China, one of the world’s largest banks, to block yuan-denominated transfers from third countries to Russia. This move comes after Chinese exporters began routing such transfers through third countries to circumvent Chinese bank restrictions on direct transactions with Russia for the same reason. “Sanctions are also juicing Russian inflation, raising the cost of imports from microchips to animal feed, says William Pomeranz, a senior fellow at the Kennan Institute,” who was interviewed by Craig Mellow in Barron’s. These negative economic impacts have yet to translate to military de-escalation.
Read more:
- Major Chinese Bank Deals Blow to Russia’s Economic Lifelines, Newsweek
- Russia’s War Economy Is Hitting Its Limits, Foreign Policy
- EU’s Kallas Backs Tapping Russian Assets Directly to Aid Kyiv, Bloomberg
- Russia’s Arctic LNG 2 Barely Pumps Any Gas after Sanctions Lock In Exports, Bloomberg
Syria (background)
The US Treasury Department imposed sanctions on 26 individuals and entities linked to the Syrian Al-Qatirji Company this month over its alleged use of oil proceeds to benefit the Iranian Islamic Revolutionary Guards Corps-Quds Force and Ansar Allah.
According to the European Commission, Syria’s humanitarian needs are “at an all-time high, with 7 out of 10 Syrians requiring humanitarian assistance. More than 13 years after the start of the Syria crisis, half the population is displaced, both inside and outside the country.” According to experts, US sanctions have played a significant role in exacerbating the country’s economic and humanitarian crisis, and have inhibited reconstruction and the provision of humanitarian assistance.
Read more:
- US Targets Syrian Conglomerate with Sanctions for Funding IRGC-QF, Houthis, United Press International
- European Civil Protection and Humanitarian Aid Operations: Syria, European Commission
Venezuela (background)
The election of Donald Trump, who imposed waves of indiscriminate economic sanctions on Venezuela with disastrous humanitarian consequences during his first administration — and his nomination of Senator Marco Rubio (R-FL) as secretary of state, and Representative Mike Waltz (R-FL) as national security adviser — likely means an escalation of economic warfare against Venezuela in the coming years. While Venezuelan president Maduro was quick to extend congratulations to president-elect Trump, proposing a “new start,” opposition leader María Corina Machado pleaded with the incoming administration to tighten the sanctions.
However, such sanctions would risk undermining Trump’s other priorities. As the Washington Post reports:
Oil industry executives whose support Trump has courted argue that more sanctions will only push Venezuela closer to China and Iran, while bumping up U.S. gas prices. But sanctions also could encourage even more Venezuelans to flee their country, adding to the hundreds of thousands who have arrived in the United States in recent years. Trump has threatened a “massive deportation” of migrants, but returning them to Venezuela would require cooperation from Maduro, who has refused to take them back.
Maduro himself has reportedly noted this to the incoming Trump administration, “[expressing] a willingness to work with Trump immediately on an agreement focused on migration issues, including allowing deportation flights of Venezuelans” in exchange for alleviating the pressure of oil sanctions. A July Washington Post exposé revealed the significant role that Trump-era sanctions have played in driving migration from Venezuela — a consequence that Trump was repeatedly warned about, according to reports.
Also this month, the US House of Representatives passed the BOLIVAR Act (H.R. 825), which would bar, for three years, any “executive agency from entering into a contract for the procurement of goods or services with any person that it determines, with the concurrence of the Department of State, knowingly engages in significant business operations with the Maduro regime in Venezuela.” While the act is partially redundant to existing executive branch sanctions, the codifying of sanctions into law makes them more difficult to lift when it may be strategic to do so, and risks contributing further to Venezuela’s economic woes and resulting outmigration. It is unclear whether the bill will be taken up in the Senate before the end of the year.
Finally, the Biden administration has taken a more aggressive position toward Maduro three months after July’s contested presidential election results. Secretary of State Blinken and other US officials are now referring to opposition leader Edmundo González Urrutia as the “president-elect,” in what may be an attempt to limit the Trump administration’s policy options, according to a former Republican foreign policy hand. Previously, the administration had declared González to have won the election, but fell short of calling González “president-elect.”
Read more:
- Venezuela an Early Test for Trump’s Deal-Making Foreign Policy, The Washington Post
- H.R.825 – BOLIVAR Act, Congress.gov
- Trump White House Was Warned Sanctions on Venezuela Could Fuel Migration, The Washington Post
Other
As noted above, the election of Donald Trump likely entails a ramping up of unilateral economic sanctions. Despite Trump’s recent claims to have used sanctions sparingly and temporarily, the first Trump administration used economic sanctions extensively, with devastating economic and humanitarian impacts in countries around the world, including Cuba, Iran, and Venezuela. The Biden administration, with minor exceptions, maintained these Trump-era policies, and significantly ramped up the use of sanctions in particular cases, such as on Russia. While certain Trump nominees, such as Tulsi Gabbard, have shown reservations regarding sanctions in the past, the nomination of Senator Marco Rubio (R-FL) for secretary of state appears to increase the likelihood of an aggressive, sanctions-heavy approach.
However, the intensive use of sanctions would run directly counter to another Trump administration priority: migration. As members of Congress, foreign leaders, and top economists have made clear, broad economic sanctions are a major push factor for migration to the United States.
In their joint declaration following the group’s summit in Kazan, Russia in late October, the BRICS+ countries expressed their “[deep concern] about the disruptive effect of unlawful unilateral coercive measures, including illegal sanctions, on the world economy, international trade, and the achievement of the sustainable development goals.” The countries also agreed to deepen their efforts to construct an alternative to the current global monetary and financial infrastructure that would be less susceptible to US unilateral sanctions.
Northern Gaza remains sealed off by the Israeli military, with agencies not allowed to deliver aid to the area in over a month, said the director of UNRWA affairs in Gaza as he warned of an imminent famine in the region. The UN Office for the Coordination of Humanitarian Affairs said on November 13, “so far this month every attempt by the UN to access besieged areas of north Gaza with food and medicines had failed, amid a continuing Israeli siege.” The UN-backed IPC Famine Review Committee issued an emergency alert on November 8 stating, “There is a strong likelihood that famine is imminent in areas within the northern Gaza Strip,” and “Immediate action, within days not weeks, is required from all actors.” FEWS NET, another internationally supported organization monitoring food insecurity, stated that food insecurity has severely worsened since October, with the siege in Northern Gaza causing a near-total blockade of food, making famine a likely outcome. At the same time, a UN Special Committee has found “Israel’s warfare methods in Gaza consistent with genocide, including use of starvation as a weapon of war.”
In mid-October, the US sent a letter to Israel warning that military aid could be cut off if the country did not increase humanitarian assistance to Gaza within 30 days. The deadline passed on November 13, and despite the dire situation outlined above, as well as a joint letter from several prominent aid organizations noting that Israel had failed to meet the US’s demands, Washington announced that there would not be any consequences.
On November 22, the United States issued visa restrictions for former Colombian military general Mario Montoya Uribe “due to his involvement in gross violations of human rights. There is credible evidence that during his tenure, Montoya Uribe was involved in extrajudicial killings of civilians, which were falsely reported as combat deaths during Colombia’s internal armed conflict,” the State Department said in a statement.
Read more:
- BRICS Summit: Key Takeaways from the Kazan Declaration, Reuters
- Strengthening Global Sanctions: Two Years of Enhanced Partnership, UK Office of Financial Sanctions Implementation
- Zimbabwe: ‘Zimbabwe Ready to Work With Trump’, The Herald
- Half of Russia’s Airbus Fleet Now Obsolete Due to Sanctions: Russian Media, Newsweek
- Turkey Seeks US Sanctions Waiver to Continue Russia Gas Flow, Bloomberg
- US Expands Sanctions Against Bosnian Serb Leader’s Network, Reuters
- UN Security Council Unanimously Renews Yemen Sanctions, Anadolu
- UN Sanctions 2 Generals from Sudan’s Paramilitary RSF for Key Roles in War, The New Arab
- US Imposes Sanctions on Six Senior Hamas Officials, Middle East Monitor
- Will New Myanmar Sanctions Make a Difference?, Arab News
- US Sanctions More Hardline Israeli Settlers before Trump’s Term, Bloomberg
- Trump Eyes Rubio for Top Diplomat, but Will Sanctions Create Chaos for US-China Ties?, South China Morning Post
- Who Is Carlos Trujillo, Rumored to Be the Next Assistant Secretary of State for Western Hemisphere Affairs?, CEPR
- Israel Cuts off Humanitarian Aid to Gaza, El País
- Nvidia Meets Chinese Trade Negotiator as Fresh US Chip Sanctions Loom, South China Morning Post
About Sanctions Watch
Economic sanctions have become one of the main tools of US foreign policy despite widespread evidence that they can cause severe harm to civilian populations (which may, in fact, be the point). Though now a defining feature of the global economic order, sanctions and their human costs receive relatively little attention in most US media outlets.
CEPR’s Sanctions Watch news bulletin aims to generate more awareness on the use and impact of sanctions through monthly round-ups of news and analysis on US sanctions policy.
Click here to see past editions of CEPR’s Sanctions Watch.
