CEPR Sanctions Watch May 2024

In this edition of Sanctions Watch, covering May 2024:

  • Afghanistan is hit with more deadly floods as sanctions contribute to a dire humanitarian crisis;
  • The US says Cuba is “cooperating” in the fight against terrorism, prompting renewed calls to remove the “State Sponsor of Terrorism” designation;
  • Sanctions may have contributed to the Iranian president’s death in a helicopter crash;
  • Alleged North Korea-Russia arms transfers hit with sanctions by the US and allies;
  • The US sanctions nearly 300 individuals and entities connected to Russia, while the EU approves a plan to use the interest on Moscow’s frozen assets;
  • The Syria sanctions bill appears (thus far) stalled in the Senate;
  • The General License expiration is felt in Venezuela as oil output and exports drop; and
  • CEPR publishes a US Sanctions Policy FAQ and more.


Background: Following the Taliban takeover in 2021, the Biden administration blocked Afghanistan’s central bank from accessing roughly $7 billion of its foreign reserves held in the United States. Half of these assets have since been allocated to a trust fund, largely under US control, that has yet to disburse funds to Afghanistan. Approximately $2 billion of central bank assets have also been blocked by European authorities. Along with the cutoff of aid, this asset seizure — representing nearly the entirety of Afghanistan’s foreign reserves — has contributed to a collapse of the country’s economy.

Afghanistan has experienced another round of natural disasters this month, with flash floods leaving hundreds dead. The International Rescue Committee included natural disasters as one of its six reasons for listing Afghanistan as “one of the countries most likely to experience a worsening humanitarian crisis in 2024.” Another reason is “economic pressures,” as “the country finds itself economically isolated, losing development funding that previously subsidized an estimated 75% of Afghanistan’s spending on public services. Meanwhile, the funds of the Afghan central bank remain frozen and inaccessible as sanctions and international restrictions limit foreign financial inflows… Nearly half of the population lives in poverty and will continue to experience economic hardship.” To help alleviate this situation, Afghan American journalist Freshta Jalalzai wrote for The Diplomat that “Easing sanctions and integrating Afghanistan into the global community through political negotiations would provide a lifeline for the millions of Afghans trapped in isolation.”

In a recent United States Institute for Peace article about the apparent increased activity of Afghanistan’s private sector, Senior Afghanistan Expert Dr. William Byrd detailed some of the “formidable economic challenges” faced by businesses and the Afghan economy as a whole, including the “loss of more than $8 billion a year of civilian and security aid, the run on Afghan banks, freezing of some $9 billion of Afghan central bank assets in the U.S. and elsewhere and the stoppage of financial transactions with foreign banks, among other things.” The impact of these and other challenges “on aggregate demand in the economy, and on Afghans’ incomes, has been dramatic. GDP declined by more than a quarter in 2021 and 2022 and there is no sign of significant recovery in 2023, nor on the horizon in 2024 and beyond.”

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Background: The US embargo against Cuba is one of the oldest and most stringent of all US sanctions regimes, prohibiting nearly all trade and financial transactions between the United States and Cuba since the early 1960s. After a brief loosening under Obama, sanctions were tightened and expanded under Trump — a policy that the Biden administration has mostly maintained.

Nearly a year after having first announced that measures favoring the private sector were on their way, the Biden administration has launched a policy designed to ease the impacts of the embargo on small businesses and entrepreneurs. The changes include authorizing small private sector actors to maintain US bank accounts, widening the scope of allowable internet-based activities, and ending the prohibition on “U-turn” transactions — allowing US banks to process financial transactions that originate and terminate outside the US. Organizations such as the Alliance for Cuba Engagement and Respect welcomed the move as a long-awaited step forward while also noting that such piecemeal reforms are insufficient when broad restrictions such as the State Sponsors of Terrorism (SSOT) designation continue to severely impact the entire civilian population.

Also this month, the US State Department removed Cuba from its list of countries that are “not fully cooperating” in its fight against terrorism. While inclusion on this list is distinct from the SSOT designation — which entails extensive sanctions — the shift prompted a number of calls to end the latter. Rep. Ilhan Omar (D-MN) said, “This is a start. But real progress requires removing them from the list of countries sponsoring terrorism and ending the embargo.” Also calling to end the SSOT designation, Rep. Jim McGovern (D-MA) remarked that “U.S. sanctions and policies are intensifying and worsening the social and economic condition throughout Cuba… This is being done deliberately and knowingly. It’s a human rights violation… being done with a degree of indifference and callousness I find shocking.”

In addition, the Colombian foreign ministry called on the US to remove the “unjust” SSOT designation, as did the Latin American Grupo de Puebla and the Caribbean Community. Adding weight to these calls, Secretary of State Blinken confirmed in a hearing this month that US fugitives that live in Cuba — who were cited by President Trump in his decision to add Cuba to the SSOT list — are not linked to terrorism. A number of Republican members of Congress known for their hardline positions denounced Cuba’s removal from the noncooperation list, including Rep. María Elvira Salazar (R-FL). Earlier this month, Salazar, a staunch supporter of the embargo, said, apparently without any intended irony, that “using US federal resources like sanctions or influence through foreign aid to exact preferred policy outcomes in another country violates that country’s sovereignty and liberty.”

Also this month, a group of over 200 Cuban Americans and 30 Cuban American-led organizations sent a letter urging President Biden to fulfill his campaign promises to reverse Trump’s sanctions-heavy Cuba policy and return to the approach of the Obama era.

Finally, two new documentaries from Belly of the Beast productions premiered this month: “Uphill on the Hill” explores the politics surrounding President Biden’s failure to reverse the Trump-era Cuba sanctions, and “Hardliner on the Hudson” delves specifically into the record of leading embargo advocate Senator Bob Menendez, including his alleged corruption and ties to terrorist groups.

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Background: US sanctions on Iran began during the 1979 hostage crisis, and currently, they bar US actors — as well as some non-US actors — from almost all trade and financial transactions with Iran. Although certain sanctions were lifted as a result of the 2015 nuclear deal, the majority have been reimposed since the United States’ withdrawal from the agreement. The European Union also maintains certain trade and financial sector sanctions on Iran.

The death of Iranian President Ebrahim Raisi in a helicopter crash this month prompted much debate over the potential role of sanctions in the incident. Former Iranian foreign minister Mohammad Zarif remarked that “One of the culprits behind [the] tragedy is the United States, because of its sanctions that bar Iran from procuring essential aviation parts.” As Al Jazeera and the Financial Times reported, Iran certainly faces difficulties in acquiring necessary equipment as a result of sanctions, but other commentators have questioned the specific role of sanctions in this particular incident.

Also this month, the United States imposed new sanctions on 14 individuals and 17 entities allegedly tied to the country’s nuclear efforts, and the EU announced sanctions against 10 Iranian individuals and entities purportedly connected to Russia’s war in Ukraine and various terror groups. Responding to threats from the United States over its ties to Iran, Malaysian Home Minister Saifuddin Nasution Ismail remarked that “We will only recognize sanctions if they are imposed by the United Nations Security Council… We don’t recognize any sanctions imposed by an individual country.” The US similarly warned Pakistan against expanding its ties with Iran following a reconciliatory meeting between the two countries.

The Associated Press reported that Iran’s UNESCO world heritage-inscribed rug-weaving industry is suffering as a result of US sanctions: “‘It started when Trump signed that paper,’ [carpet shop owner Ali] Faez told The Associated Press, referring to the renewed sanctions. ‘He ruined everything.’”

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North Korea

Background: The United States first imposed sanctions on North Korea during the Korean War in the 1950s. Following the country’s 2006 nuclear test, more stringent sanctions were added, and they have periodically intensified since then. US sanctions now target oil imports and cover most finance and trade as well as the key minerals sector. In addition, the UN Security Council has adopted nine major sanctions resolutions since 2006. The European Union has implemented them in addition to its own sanctions.

Between May 16 and May 21, new sanctions targeting alleged arms transfers between North Korea and Russia were announced by the United States (targeting two individuals and three entities), Canada (two individuals and six entities), Australia (six entities), United Kingdom (one individual and three entities), and New Zealand (28 individuals and 14 entities). The EU, Japan, South Korea later announced similar sanctions.

On April 30, a UN panel of experts on North Korea sanctions was officially disbanded due to Russia’s veto of a UN Security Council resolution to extend the body’s mandate. The US has said that it will “double down” on cooperation with Japan and South Korea to monitor sanctions enforcement. In an interview about the panel’s dissolution, Stephanie Kleine-Ahlbrandt, a former member of the panel and Nonresident Fellow at the Stimson Center, said:

“With regard to US policy on North Korea, the situation [of challenges to the panel’s independence] was further exacerbated by a broader tendency to deprioritize the significance of North Korea within overall US foreign policy, except during brief periods triggered by events such as nuclear tests or missile launches. Indeed, within diplomatic circles, it has been an open secret that US policy towards North Korea has completely failed to achieve its objectives. This challenge is compounded by the troubling approach taken by the US with North Korea, where sanctions are not just one component within a broader policy framework, but rather the policy itself. Consequently, the failure of sanctions to achieve their objectives correlates with the failure of the entire approach.”

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Background: US sanctions on Russia’s financial, energy, and defense sectors began after the 2014 annexation of Crimea. This sanctions regime was greatly expanded, particularly by the United States, the United Kingdom, and the European Union in response to the 2022 invasion of Ukraine. It includes the barring of most financial transactions and of Russian oil and gas imports as well as the freezing of Russian assets abroad, among other measures.

At the beginning of this month, the United States sanctioned nearly 300 individuals and entities for allegedly helping Russia restock its supply of weapons, procuring materials for its chemical and biological weapons programs, and having connections to the death of opposition activist Alexei Navalny. The measures are directed at targets in Russia, China, the UAE, Belgium, Turkey, and several other countries. The Financial Times reported that as the US continues to intensify sanctions against Russia, banks will face increasing challenges and vulnerabilities when complying with and enforcing these measures. President Biden also signed into law a bill that bans the import of uranium enriched in Russia. Given that approximately 24 percent of enriched uranium used in US nuclear power plants comes from Russia, Kathryn Huff, the Department of Energy’s Assistant Secretary for Nuclear Energy, said that the US would work with other countries to find an “allied alternative.” On May 30, the US sanctioned two entities in the Central African Republic for allegedly supporting the Wagner Group, a Russian private military company.

After months of discussion, the EU has officially adopted a plan to channel the interest generated by frozen Russian assets toward Ukraine. Ninety percent of the funds will go to the European Peace Facility, a fund that many EU member states use to be reimbursed for weapons and ammunition that they send to the country, while the remaining 10 percent will be allocated to the EU’s budget to fund reconstruction efforts and support Ukraine’s defense industry. The EU expects the interest on Russian assets to yield approximately $3.3 billion per year. Funds generated before February 15 will stay with Euroclear, the Belgian clearing house where most of the assets are held, to defend against retaliation for this move.

A first tranche of funds is expected in July, but this unprecedented plan may be replaced by a US-led proposal under consideration by the G7. This scheme involves issuing up to $50 billion in loans to Ukraine, with the future value of interest on frozen Russian assets as collateral. France and Germany are reportedly warming up to the plan, but there are still challenges and concerns about Russian retaliation; repayment of the loan when the war ends and assets are returned to Russia; the use of Russia’s assets as a bargaining chip in peace negotiations; and negative effects on the euro. Critics “argue that using an asset as a collateral means owning the asset, which amounts to confiscation,” wrote Patrick Wintour for The Guardian. Russia agrees, with Putin making preparations for retaliation and a government spokesperson stating that Moscow considers the EU’s approved plan to be an act of theft and a violation of international law. The EU also adopted a new Russian sanctions regime against those allegedly responsible for human rights violations, targeting 20 officials. Discussions in the EU about a 14th package of Russia sanctions, which could also target Belarus, are still ongoing.

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Background: As a designated “State Sponsor of Terrorism” since the list’s creation, Syria has faced unilateral sanctions in some form since 1979. These sanctions were augmented during the George W. Bush administration and were greatly expanded under Presidents Obama and Trump to bar most financial transactions with Syrian entities. The “Caesar Act,” passed by Congress in 2019, goes even further, imposing secondary sanctions on third-party entities that engage in such transactions, even if they have no connection to the US.

The Assad Regime Anti-Normalization Act of 2023 (H.R. 3202), which passed the House in February of this year, appears thus far to have stalled in the Senate, with reports indicating that the White House and Senate Foreign Relations leadership may be playing a role in pushing against its passage. As previously reported in Sanctions Watch, the bill would extend Caesar Act sanctions by eight years and expand the types of transactions covered by sanctions. CEPR Senior Research Fellow Francisco Rodríguez wrote in The Hill last year that the bill “will further punish millions of innocent Syrians.” Additionally, former National Security Council senior director for counterterrorism Steven Simon and Syria expert Joshua Landis remarked that it would have “disastrous humanitarian impacts.”

The EU extended its Syrian sanctions regime for another year. The regime targets 316 persons and 86 entities, including the humanitarian exemptions that were introduced in February 2023 following the earthquake.

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Background: While the George W. Bush and Obama administrations adopted sanctions on military equipment and against Venezuelan individuals, it was under Trump that broad financial sanctions and restrictions on oil exports were first implemented. These sanctions and restrictions have caused at least tens of thousands of deaths of Venezuelans due to the resulting economic collapse and drastic reduction in access to essential imports and production, including food, medicine, health care, and health infrastructure. In addition, the United States, the United Kingdom, and others have frozen — and in some cases transferred to opposition actors — Venezuelan state assets.

Following President Biden’s decision to let the temporary oil sanctions waiver General License 44 expire last month, Venezuela’s oil production declined by 13,000 barrels per day (bpd) to 809,000 bpd. Oil exports fell more sharply, by 38 percent, as “tanker owners and customers pulled several vessels waiting to load out of the country’s waters as a reimposition of U.S. sanctions approached,” Reuters reported. As reported in last month’s Sanctions Watch, President Biden reiterated that while it was allowing the General License to expire, it would consider specific licenses for corporations to operate in the sanctioned oil sector on a case-by-case basis. This month, Reuters confirmed that the administration plans to reserve these specific licenses for companies already operating in the country and is unlikely to issue them to new operators.

Also this month, the European Union removed a few top Venezuelan election officials from its sanctions list. At the same time, however, it extended the rest of its Venezuela sanctions to January 2025, prompting the Maduro administration to consider withdrawing its invitation for the EU to oversee the coming elections.

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CEPR published a US Sanctions Policy FAQ this month. Intended as a resource for advocates and policymakers alike, the FAQ provides brief, accessible answers to a range of questions on US economic sanctions and their impacts around the world, such as the following: What are economic sanctions? How do economic sanctions impact civilians? Are economic sanctions legal? Please feel free to share feedback and questions about the resource ([email protected]).

On May 6, Israel launched a ground assault into the Gazan city of Rafah, located at the Egyptian border, where 1.5 million Palestinian refugees had clustered to avoid Israeli shelling and bombing. Three days before the offensive, the head of the UN World Food Programme (WFP) said that there was “famine — full-blown famine — in the north, and it’s moving its way south.” Israel’s closing of key crossings into Gaza as part of the assault “completely halt[ed] the inflow of meagre levels of humanitarian aid,” the UN human rights chief said. As of May 22, the UN said that no major aid checkpoints into Gaza were operating; however, some aid managed to enter through the Kerem Shalom crossing on May 27. Israel claims that the Rafah crossing, which it took control of on May 7, is open, and it blames Egypt for not allowing any aid through. Egypt, however, argues that Israel’s military operations in the area are the main factor blocking aid and insists that the crossing is open from its side. The incursion into Rafah has led the WFP to say “the threat of famine in Gaza never loomed larger,” the UN aid chief to warn that famine is an immediate risk, and UNICEF to assert that it is not “far-fetched” to assume that famine is taking place in the south. Human Rights Watch contends that Israel is violating an International Court of Justice (ICJ) order by obstructing aid into Gaza.

On May 8, President Biden announced that while the US remained committed to Israel’s defense, Washington was halting a shipment of certain bombs to Israel over concerns about the Rafah assault. By May 15, however, Biden reportedly told lawmakers that he planned to move ahead with a $1 billion arms sale to Israel. Belgium is also reportedly attempting to rally support from other countries to sanction Israel, and over 60 members of the European Parliament wrote a letter to the EU’s top officials urging sanctions against Israel. On May 24, the ICJ ordered Israel to immediately stop the Rafah offensive, adding that “the humanitarian situation is now to be characterized as disastrous.”

Amid reports that the International Criminal Court (ICC) was considering an arrest warrant for Israeli Prime Minister Benjamin Netanyahu, 12 Republican senators wrote a letter to the Court on April 24 threatening sanctions should such an action occur. On May 20, the ICC issued arrest warrants for Netanyahu, Israeli Defense Minister Yoav Gallant, and three Hamas leaders. Netanyahu is accused of several war crimes and crimes against humanity, including using starvation as a method of warfare. The Court’s prosecutor said that threats of sanctions threatened the body’s “independence and impartiality,” a sentiment echoed by Human Rights Watch and 120 other human rights and civil society organizations in a letter to President Biden urging him to oppose possible sanctions. “Acting on these calls would do grave harm to the interests of all victims globally and to the U.S. government’s ability to champion human rights and the cause of justice, which are stated priorities of your administration,” the letter said. When questioned about the ICC warrants in a congressional hearing, Secretary of State Anthony Blinken signaled that the Biden administration would work with lawmakers on possible sanctions.

The Biden administration announced a slew of new sanctions on Nicaragua this month, including against two gold companies, a Russian-run police training center, and over 250 individuals for their alleged culpability in “attacks on human rights.” The administration highlighted the Ortega government’s purported failure to stem migration, particularly from Venezuela, as a source of concern, and it issued a “policy alert to inform the aviation and travel industry of the ways in which smugglers are facilitating this illegal migration.” Ironically, US sanctions are widely considered to be a major driver of migration from Venezuela. There have been no major developments regarding the Restoring Sovereignty and Human Rights in Nicaragua Act of 2024 (S.1881), which was approved by the Senate Foreign Relations Committee in April but has not advanced to the Senate floor for a vote.

The Biden administration also launched a review of US-Georgian relations and imposed visa restrictions on leaders of the country’s ruling Georgian Dream party this month. The measures are a response to a new law that would require NGOs that receive more than twenty percent of their funding from foreign sources to register themselves as foreign agents. The US Senate is reportedly set to consider a law that would impose further sanctions and suspend certain US-Georgian security cooperation programs.

In a recent Wall Street Journal article, journalists Ian Talley and Rosie Ettenheim argue that US and Western sanctions against countries like Russia, Iran, and Venezuela have created an “axis of [sanctions] evasion” led by Beijing. The authors write:

Unprecedented finance and trade restrictions on Russia, Iran, Venezuela, North Korea, China and other authoritarian regimes have squeezed those economies by curbing access to Western goods and markets. But Beijing has increasingly foiled those U.S.-led efforts by bolstering trade ties, according to Western officials and customs data. …China gets oil from three OPEC powerhouses—Russia, Iran, and Venezuela—at heavily discounted prices. That is a windfall for the world’s biggest oil importer, which bought more than 11 million barrels of oil a day last year to keep its economy running. Those countries, in turn, then have revenue they can use to buy sanctioned goods from China.

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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.

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