October 31, 2024
In this edition of Sanctions Watch, covering October 2024:
- US Special Envoy to Afghanistan Tom West assigned to Office of Sanctions Coordination; envoy position scrapped;
- The international community condemns the embargo on Cuba as the island is plunged into darkness;
- The New York Times asks whether current tensions with Iran could have been avoided had Biden returned to the nuclear deal and lifted Trump’s sanctions;
- The US and allies establish a new North Korea sanctions enforcement monitoring panel;
- Western countries move forward with Ukraine loan backed by Russia’s frozen assets, as sanctions bite;
- The US imposes new sanctions on alleged Captagon traffickers in Syria;
- Venezuela oil exports dropped amid sanctions;
- The Washington Post covers the sanctions lobbying industry, and more.
Afghanistan (background)
The United States has scrapped the position of special representative for Afghanistan, instead appointing the current special representative, Tom West, to be the State Department’s acting head of the Office of Sanctions Coordination. Abubakar Siddique wrote for Radio Free Europe that this decision “signals Washington’s increasing disengagement from Afghanistan.” This disengagement may mean that Washington will further prioritize sanctions policies over diplomacy in its approach to Afghanistan. The International Federation of Red Cross and Red Crescent Societies’ Asia Pacific regional director, Alexander Matheou, commented on the crisis that the diplomatic impasse with Afghanistan — which has led to sanctions — has contributed to, saying, “The only way to break [Afghanistan’s] dependence on humanitarian aid is to resolve this diplomatic deadlock. If trade and development investments could resume, we could begin building resilience and economic independence for local humanitarian organizations.”
The United Nations Development Programme and the Oxford Poverty and Human Development Initiative published this year’s Global Multidimensional Poverty Index on October 17, featuring an in-depth analysis of poverty in Afghanistan. It states: “From 2015/2016 to 2022/2023 poverty rose by more than 5.2 percentage points, with 5.3 million additional people—1 in 20 Afghans— falling into multidimensional poverty.” As frequently noted in Sanctions Watch, sanctions on Afghanistan and the freezing of its central bank assets have been major contributors to this instability and economic hardship.
Also this month, Afghan business leaders met with a senior German diplomat to discuss the challenges facing Afghanistan’s private sector. News outlet Amu TV reports that the business leaders “highlighted the significant hurdles created by international sanctions on Afghanistan’s banking system following the Taliban’s return to power. … International sanctions on Afghanistan, particularly those freezing the country’s central bank assets, have left businesses struggling to access capital.”
Read more:
- Lavrov Urges West to Lift Sanctions on Afghanistan, EFE
- Taliban Official Calls on UK to Help Release Frozen Central Bank Assets, Afghanistan International
- UAE-Based Afghan Business Council Discusses Private Sector Challenges with German Diplomat, Amu TV
Cuba (background)
The UN General Assembly voted to call for an end to the US embargo of Cuba, citing its devastating effects on the civilian population and the fact that it is in violation of the UN Charter. The non-binding resolution passed on October 30 by a vote of 187 to 2, with only the US and Israel opposed.
This marks the 32nd time in as many years that the resolution has passed nearly unanimously. However, just hours after the vote, Argentine president Javier Milei, who has expressed a desire to align the country’s foreign policy more closely with that of the US and Israel, dismissed the foreign minister over Argentina’s vote in favor of the resolution, despite the country’s historical support for it.
Brazil’s foreign ministry Tweeted, “The severe sanctions unjustifiably imposed against Cuba, both through the embargo and through its inclusion on the list of State Sponsors of Terrorism, unfairly penalize the Cuban people and prevent an adequate response to the humanitarian crisis caused by Hurricane Oscar.” Multiple regional groupings, including CARICOM, the EU, the G77, the Non-Aligned Movement, the Association of Southeast Asian Nations (ASEAN), and the Organisation of Islamic Cooperation, also called for the embargo’s end. Honduras, speaking for the Community of Latin American and Caribbean States (CELAC), said the embargo “continues to be the main obstacle to normal development in Cuba. … It does substantial and unjustifiable harm to the well-being of the Cuban people. … The member states of CELAC are opposed to the unjust inclusion of Cuba on the list of State Sponsors of Terrorism (SSOT), which, in addition to being unsubstantiated, has increased the chilling effect of embargo-related restrictions.”
EU member states also called for the removal of Cuba from the SSOT list, noting that “its maintenance on the list until today without obvious justification, has introduced additional obstacles to international financial transactions with the island.” In addition, the EU reiterated its rejection of “the US activation of Title III and IV of the Helms-Burton Act in April 2019,” emphasizing that it “breaches the commitments made by the US in the US-EU agreements of 1997 and 1998” upheld under the Clinton, George W. Bush, and Obama administrations.
Nearly the entirety of Cuba was left without power when the island’s electric grid crashed this month just before Hurricane Oscar hit. The blackout forced schools and businesses to close. Refrigeration and water pumps failed, exacerbating already dire food and water shortages. Gas stations could not pump gas, so public transportation was shut down. Hospitals were forced to operate with limited or no electricity — as the Miami Herald’s Syra Ortiz Blanes points out, such an interruption of health care can lead to serious health challenges, and even deaths. Efforts to restore power were met with repeated setbacks.
This critical new stage of an already grave economic and humanitarian crisis, driven in large part by the US embargo, prompted renewed calls from members of Congress to remove Cuba from the SSOT list and begin the process of normalization. US Congressman Jim McGovern (D-MA) Tweeted, “US policy has directly contributed to Cuba’s energy problems by sanctioning ships carrying oil to Cuba & starving the country of foreign exchange earnings it needs to import fuel & spare parts.” Rep. Barbara Lee (D-CA) similarly wrote, “it is no secret that US policy has directly contributed to Cuba’s energy issues,” and Sen. Peter Welch (D-VT) stated, “The recent devastating blackouts in Cuba are the result of many factors including U.S. sanctions, which have hurt the Cuban people.”
Writing in Foreign Policy, American University professor William LeoGrande outlined how (contrary to White House claims) the US embargo is doubtless a major cause of the current crisis, and argues that easing economic restrictions is in the US’s self-interest in order to prevent further migration and potential unrest. Indeed, an anonymous official from the US State Department acknowledged this month that the dire economic situation in Cuba exacerbates migration from the country, though they failed to acknowledge the link between the hardening of US sanctions under Trump and Biden, and the island’s economic decline.
Such a shift in policy would also be popular among voters. A new poll by the Institute for Global Affairs found that the majority of the US public across all age groups — including 66 percent of Democrats and 65 percent of people aged 18–29 — support normalizing relations with Cuba. Separately, a Florida International University poll of Cuban Americans in South Florida found, among other things, that community support for the Democratic Party reached its peak in the Obama years and has not recovered since, indicating that the Biden administration’s decision to maintain Trump’s hard-line pro-sanctions approach has not borne electoral benefits.
Read more:
- By Helping Cuba, Washington Would Be Helping Itself, Foreign Policy
- Biden’s Cuba Policy Leaves the Island in Wreckage, Drop Site News
- Some Cubans Depend on Sugar Water as Food Shortages Bite, AFP
- Cuba’s Economic Crisis: US Sanctions and the Problem of ‘Overcompliance’, Le Monde Diplomatique
Iran (background)
As relations with Iran hit perhaps their most precarious point in years, The New York Times asks “whether the crisis might be less combustible had U.S. policy toward Iran not veered from cautious cooperation to angry confrontation several years ago” when the Trump administration unilaterally withdrew from the 2016 nuclear deal and reimposed economic sanctions. “I think it’s obvious that the decision to withdraw from the nuclear deal, which Iran was complying with, both removed the guardrails on Iran’s nuclear program and removed any incentive for Iran to move in any direction other than a more confrontational, harder line,” former Obama administration official Ben Rhodes told the Times. Rhodes also “criticized the Biden administration for not pushing earlier and harder” for a return to the deal, reports the Times.
The United States responded to Iran’s October 1 ballistic missile attack on Israel — itself a response to Israel’s significant escalation of indiscriminate bombing in Southern Lebanon — with new sanctions against Iran’s petroleum and petrochemical sectors. The measures also target a number of ships and shipping companies allegedly involved in transporting Iranian oil, which the Biden administration describes as a “ghost fleet.” Shortly thereafter, the EU imposed sanctions against seven entities, including Iranian airlines and procurement firms, and seven individuals, including prominent officials of the Islamic Revolutionary Guard Corps, for alleged roles in Iranian transfers of missiles and drones to Russia.
A US court of appeals has made a decision that appears to expand the executive’s power to enforce secondary sanctions. The court unanimously ruled that the federal government can prosecute a Turkish state-owned bank for allegedly helping Iran evade US sanctions. According to Reuters, the court “found no basis under centuries-old common law principles for foreign state-owned companies to be absolutely immune from U.S. prosecution related to commercial, nongovernmental activities,” with one of the judges saying the court “should defer to the executive branch’s determination that the U.S. Department of Justice could prosecute” the bank.
Read more:
- Iran Crisis Ignites New Debate About Trump’s Nuclear Deal Exit, The New York Times
- US Expands Sanctions to Iran’s ‘Ghost Fleet’ of Oil Tankers, Reuters
- Iran’s Aviation Woes Compounded by Latest EU Sanctions, AFP
North Korea (background)
The United States, South Korea, Japan, and a number of other multinational partners announced the establishment of a joint body to monitor the enforcement of sanctions on North Korea. The North Korean government called the decision “unlawful and illegitimate.” The new group is intended to replace the UN panel of experts whose mandate at the UN Security Council was vetoed by Russia earlier this year. As noted in the March edition of Sanctions Watch, “The veto may have been a reaction to the Council’s failure to adopt Moscow and Beijing’s proposals to reduce the panel’s reporting requirements, and add sunset clauses to the sanctions themselves. Before the vote, Russia’s ambassador to the UN said the West was trying to ‘strangle’ North Korea with sanctions that are ‘detached from reality.’”
Read more:
- US, South Korea, Japan Unveil New Team to Monitor North Korea Sanctions, Reuters
- US Delays Vote to Extend UN Sanctions Panel on North Korea, NK News
- Russia Was Wrong to Endorse Wide-Ranging North Korea Sanctions: Russian Expert, NK News
Russia (background)
The US and its allies have imposed various sanctions on Russia this month. For the first time, Washington sanctioned Chinese manufacturers for allegedly collaborating with Russia in the production of drone attack systems. The US also targeted almost 400 individuals and entities in Russia, India, China, Turkey, and other countries for allegedly aiding Moscow in evading sanctions and facilitating the development and procurement of military equipment. The UK, meanwhile, has sanctioned 18 Russian oil tankers and four liquefied natural gas vessels, a Russian cyber-crime group, Russian troops accused of using chemical weapons, and Russian agencies allegedly engaging in disinformation campaigns, in addition to launching a specialized trade sanctions unit with the power to fine companies that violate Russia sanctions. Across the English Channel, the EU set up a framework under which it will be able to sanction “people accused of cyberattacks, information manipulation or acts of sabotage on behalf of Russia to undermine EU support for Ukraine,” AP reported. This comes as a recent Foreign Policy article notes that the UK and EU are working to expand their use of secondary sanctions.
Reports continue to emerge on the detrimental effects of sanctions on Russia’s economy. Swedish economist and author Anders Åslund wrote in Project Syndicate this month, “My own view is that the current sanctions regime shaves off 2-3% of GDP each year, condemning Russia to near stagnation.” Bloomberg reports that the “ruble is on the slide toward 100 per dollar. … The punitive measures have exacerbated a foreign-currency shortage.” Due to payment processing challenges stemming from US secondary sanctions — including recent news that one of Singapore’s largest banks will stop handling transactions involving Moscow — Russia is reportedly preparing to barter chickpeas and lentils for rice, tomatoes, and tangerines from Pakistan. (In August, we noted that Russia was also planning to barter with China.)
The G7 appears to be finalizing a plan to provide $50 billion in loans to Ukraine backed by Russia’s frozen assets. Following the European Commission’s announcement last month of its intention to issue a $40 billion loan via a scheme aimed at alleviating US concerns over a potential Hungarian veto on extending the EU’s Russia sanctions, a majority of EU governments and the European Parliament have approved the initiative. This, in turn, led the US to announce that it would issue a $20 billion loan to Ukraine backed by Russia’s frozen assets (regardless of whether Hungary drops its veto, the Financial Times reports), with half the loan designated for economic aid and the other half for military aid, pending congressional approval of the latter. US officials expect at least half of Washington’s contributions to be disbursed before year’s end. The UK and Canada subsequently announced their own contributions of $3 billion and $3.7 billion, respectively, both backed by Russia’s frozen assets. In response, the EU lowered its contribution to $20 billion.
Some European officials, like European Central Bank President Christine Lagarde, have raised strong concerns about the legality of issuing loans to Ukraine backed by Russia’s frozen assets. Lagarde stated that “moving from freezing the assets to confiscating the assets” could “start breaking the international legal order that you want to protect, that you would want Russia and all countries around the world to respect.” According to The Guardian, the US, backed by the UK, “is determined to ‘circumvent such objections.’”
Read more:
- Taking Action with Partners to Combat Russia-Based Cybercriminal Group, US Department of State
- How EU Sanctions Against Russia Have Impacted the Economy of Cyprus, European Politics and Policy
- Russia Fast-Tracks Economic Fixes as War Costs Bite, Newsweek
- G7 Vows to Clamp Down on Russia’s Oil Sanctions Evasion, AFP
Syria (background)
The Treasury Department imposed sanctions on three individuals allegedly tied to the production and trafficking of Captagon, an amphetamine-like substance that the US Treasury Department alleges is controlled in part by, and benefits, the Assad government. Earlier this year, a Washington Post exposé revealed how US sanctions on Syria in fact spurred the Captagon trade by denying political and military elites other sources of income. The article noted that “the targets of sanctions inevitably find ways to blunt their impact, often with painful consequences for ordinary citizens.” Meanwhile, “Assad is unshaken and apparently wealthier than ever.” A more recent Wall Street Journal article similarly discussed the role of sanctions in Syria, stating: “as the Assad regime reimposed its grip on the country, it seized facilities and industrialized the drug’s production. It has ramped up production over the past decade, desperate for cash amid a civil war and international sanctions.”
Syrian officials urged sanctions relief this month, citing the new influx to the country of refugees from Israeli attacks in Lebanon.
Read more:
- Treasury Targets Hizballah Finance Network and Syrian Captagon Trafficking, US Department of the Treasury
- Sanctions Crushed Syria’s Elite. So They Built a Zombie Economy Fueled by Drugs., The Washington Post
- Syrian Official Calls for Lifting of Sanctions amid Surging Refugee Arrivals Due to Israeli Attacks, Xinhua
Venezuela (background)
Venezuelan oil production grew slightly last month from 875 to 877 thousand barrels per day, though exports dropped by 9 percent. While a small number of oil companies now have specific licenses to operate, the oil sector — which the country depends on for much of its income and foreign exchange — remains tightly constrained by US sanctions, particularly following the Biden administration’s decision to let its General License expire.
In an interview on CNN, actor and Latinx activist John Leguizamo described the role of US sanctions in exacerbating migration: “America caused a lot of this Venezuelan immigration problem. The sanctions that we put in Venezuela are … destroying their economy, and that’s why there’s the runaway immigration from Venezuela, because they can’t eat; they can’t survive.”
Read more:
- Venezuelan Oil Sector Maintains Slow Growth amid Investment Struggles and Price Concerns, Venezuelanalysis
Other
The Washington Post published an in-depth feature article examining the lobbying efforts surrounding US sanctions. It notes that, as the US has expanded its use of sanctions over the years, the sanctions lobbying and compliance industry has grown in parallel. This industry employs more than 190 former US officials to influence sanctions policy — either working to lift, ease, or impose sanctions on behalf of clients.
The article states: “foreign and corporate money has deeply penetrated the sanctions mechanism, creating a new line of revenue for some longtime Washington power brokers.” It also highlights the two main faces of the sanctions lobbying industry. On one hand, wealthy individuals and corporations use it for personal gain, as in the case of a US fertilizer company pushing for sanctions on Belarus to limit competition from its potash producers, or an Israeli billionaire trying to lift sanctions tied to corrupt deals in the Democratic Republic of Congo. On the other hand, countries like Zimbabwe, burdened by severe sanctions, turn to lobbying as a costly and desperate attempt to secure relief. Gyude Moore, a fellow at the Center for Global Development, commented that when an African country “hires another Washington lobbyist, that’s money that’s not available for schools, for hospitals … But because we’re throwing sanctions around like peanuts to birds, it’s been a booming business for Washington.”
The United States and Canada announced sanctions against the Samidoun Palestinian Prisoner Solidarity Network, claiming that the international organization, which focuses on getting Palestinians released from jail, is a “sham charity” fundraising for the secular political group the Popular Front for the Liberation of Palestine (PFLP), which is designated as a Foreign Terrorist Organization and Specially Designated Global Terrorist by the US State Department. Samidoun denies any ties to the PFLP, asserting that the sanctions are a part of an effort to silence critics of Israel’s ongoing genocide. The US-based civil liberties group Defending Rights & Dissent argues that the designation is intended to create a chilling effect on First Amendment-protected political activity. The National Lawyers Guild similarly condemned the decision.
Gazans continue to face famine due to Israel’s restrictions on aid, bombings, and forced displacement. Media reports suggest that Israel has begun to quietly implement the so-called Generals’ Plan, which involves declaring Northern Gaza a closed military zone and laying complete siege to the area, starving anyone who remains. NPR reports that UN agencies stated on October 15 that “Israel has blocked nearly all food aid from entering northern Gaza for the past two weeks.” UN Human Rights Chief Volker Türk said on October 24 that “there is extremely limited access to [Northern] Gaza. Next to no aid has reached the area in weeks, with unlawful restrictions remaining, and many are now facing starvation.” The level of aid arriving in Gaza in general reached its lowest level this month since October 7, 2023, with Al Jazeera noting that the head of Shin Bet “opposes increasing aid to Gaza and supports providing a minimum amount of it to pressure captive-release negotiations.” The latest Integrated Food Security Phase Classification report says that all of Gaza is classified as a Phase 4 (out of 5) emergency, with 133,000 people facing Phase 5 — catastrophic or famine-levels of food insecurity. Israel’s legislature also passed two laws banning UNRWA — the UN agency for Palestinian refugees and a primary provider of life-saving aid — from operating in the occupied territories of Gaza and the West Bank, likely worsening the humanitarian situation.
The “beyond catastrophic” conditions in Gaza — as described by a top UN humanitarian affairs office official — prompted the US secretaries of state and defense to send a letter to Israel, warning that military aid could be cut off if Israel did not increase humanitarian assistance to Gaza within 30 days. It highlights that “actions by the Israeli government — including halting commercial imports, denying or impeding nearly 90 percent of humanitarian movements between northern and southern Gaza in September, continuing burdensome and excessive dual-use restrictions … are contributing to an accelerated deterioration in the conditions in Gaza.” As ProPublica revealed in late September, top US officials have previously dismissed reports from USAID and the State Department documenting the blocking of US humanitarian assistance by Israel (a finding that would normally trigger the suspension of weapons shipments to Israel under US law).
On October 25, the Southern African Development Community (SADC) observed its annual Anti-Sanctions Day. SADC chairperson and Zimbabwean president Emmerson Mnangagwa stated, “In solidarity, the SADC community … joins Zimbabwe in calling for the immediate and unconditional removal of these unwarranted and cruel sanctions, which violate the basic tenets of international law and the Charter of the United Nations.” Similarly, the chairperson of the African Union Commission echoed this position, emphasizing the “African Union call for the immediate and unconditional lifting of all remaining sanctions against the Republic of Zimbabwe” and expressing concern about “the negative impact of continued sanctions against the Republic of Zimbabwe to the country’s socio-economic development and recovery efforts.” Although the Biden administration lifted several sanctions on Zimbabwe in May, it did not eliminate all of them.
Read more:
- How American Sanctions Fuel Terrible Climate Policy Around the World, The New Republic
- Special Rapporteur Concerned by Limited Access to Sanctions-Related Justice, United Nations Office of the High Commissioner for Human Rights
- US Sanctions on Cuba Are Spreading Darkness, Boston Globe
- EU Extends Sanctions on Nicaraguan Officials, Reuters
- UK, EU and Canada Impose New Sanctions Targeting Myanmar Military, Reuters
- UN Security Council Extends Sanctions, Arms Embargo on Haiti, UN News
- US Sanctions Boost China’s Cross-Border Currency Use, The Diplomat
- US Imposes First Sanctions on Chinese Firms for Making Weapons for Russia’s War in Ukraine, CNN
- China Slaps Sanctions on 3 US Firms, 10 Senior Execs over Weapons Sales to Taiwan, Reuters
- US Targets Sanctions Evasion Network Tied to Hezbollah, Reuters
- Sanctions on Sudanese Armed Forces Procurement Director, US Department of State
- Sudan: EU Sanctions Regime Prolonged for a Further Year, Council of the EU
- UK Sanctions Target Israeli Settler Outposts in West Bank, Reuters
- War on Gaza: Cross-Party Group of British MPs Call for Sanctions on Israel, Middle East Eye
- Gaza War: Expected Socio-Economic Impacts on the State of Palestine October 2024, United Nations Development Programme
- Gaza: the Rights to Food, Water & Housing- Press Conference by the Special Rapporteurs, UN Web TV
- Gaza Humanitarian Crisis Could Develop Into Famine, WFP says, Reuters
- UNRWA ‘Very Near’ Possible Breaking Point in Gaza Operation, Head Says, Reuters
- American Doctors Who Worked in Gaza: No More Bombs to Israel, Responsible Statecraft
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.
