Article • Sanctions Watch
CEPR Sanctions Watch January 2025

Article • Sanctions Watch
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In this edition of Sanctions Watch, covering January 2025:
A new peer-reviewed paper on Afghans’ psychosocial well-being since the Taliban’s return to power in 2021 notes that Afghanistan’s “loss of economic activity, propelled in many ways by international sanctions and restrictions, may be ineffective against the Taliban, but instead negatively affects the everyday Afghan citizen. The lack of active employment is linked to higher rates of physical and emotional hardship, especially among men, which may lead to further health complications, domestic violence, and extremism over the long term. … It is advisable for the US and European allies to consider eliminating current sanctions.”
Similarly, an article by experts from the International Crisis Group published this month in Foreign Affairs states:
After the Taliban seized Kabul, Afghanistan staggered under the weight of sanctions and other kinds of economic and diplomatic isolation. Other governments failed to act with sufficient speed and boldness to ease the country’s poverty crisis, and they left in place economic punishments that had no moderating effect on the Taliban but pushed Afghans closer to famine. … Materially, the sanctions and restrictions contributed to sharp declines in the value of the local currency, the central bank’s loss of access to its reserves, and disruptions to supply chains in the months after the Taliban’s return. By December 2021, UN agencies were describing Afghanistan as the world’s biggest humanitarian disaster.
The latest food insecurity analysis on Afghanistan from the UN-backed Integrated Food Security Phase Classification (IPC) estimates that around 14.8 million people are projected to face high levels of acute food insecurity between November 2024 and March 2025. “The overall economic activity remains depressed and unemployment rates high … with the threat of stagnation looming large until at least 2025, according to the World Bank. The Afghan banking sector also continues to be dysfunctional due to constraints on international transfers and concerns about liquidity and solvency,” the report added.
An article in SWI swissinfo.ch about 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 US — highlighted the severe impact of freezing Afghanistan’s assets, stating, “The US decision to freeze [Afghanistan’s] assets, along with a sudden drop in international development aid, hit Afghanistan’s economy badly. The central bank could no longer supply commercial banks with cash. … The liquidity crisis became so grave that in December 2021 the UN started shipping physical dollar notes to Kabul to fund emergency aid programmes.” Masuda Sultan of the Unfreeze Afghanistan campaign argues that withholding the funds and avoiding engagement with the Taliban ultimately harms the people of Afghanistan, saying, “While we can’t control what the Taliban do, we can do whatever is possible to help the people of Afghanistan. So we should do at least that much.”
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On January 14, with less than a week left in office, President Biden announced three long-awaited moves to ease sanctions on Cuba:
(1) The removal of Cuba from the State Sponsors of Terrorism (SSOT) list, which effectively serves to cut it off from the global financial system and is based on unjustified claims;
(2) The suspension of Title III of the Helms-Burton Act, which allows US nationals to sue those who “traffic” in property confiscated by the Cuban government and had previously been waived by every administration until Trump’s first administration;
(3) The rescission of the “Cuba Restricted List,” a list of Cuban entities — primarily hotels, stores, and tourism companies — with which transactions are prohibited even during allowable travel.
In what appeared to be an informal deal brokered by the Catholic Church, the Cuban government simultaneously announced that it would release over 500 prisoners. Biden’s move was hailed by many members of Congress, including Reps. Cohen (D-TN), García (D-IL), Jayapal (D-WA), Meeks (D-NY), Ocasio-Cortez (D-NY), Pressley (D-MA), Titus (D-NV), Velázquez (D-NY), as well as governments across Latin America who have long seen the US embargo as a grave injustice. Chair of the Progressive Caucus Rep. Greg Casar (D-TX) said that the decision “will save innocent lives and reduce forced migration.” Rep. Delia Ramirez (D-IL) said, “Cuba’s removal from the list needed to happen 4 yrs ago, but I’m glad to see it finally happen,” alluding to the fact that these steps had widely been seen as low-hanging fruit — small but important actions that President Biden could have pursued immediately upon taking office in order to break with Trump policy and fulfill his own campaign promises.
However, the hopes ignited by Biden’s moves were soon dashed, with President Trump reversing all but the Helms-Burton Title III waiver on his very first day in office. Rep. Jim McGovern (D-MA) called the reversal “an awful move that hurts ordinary Cubans. It makes America look stupid, runs contrary to our allies, increases migration, and makes us less safe. I’m ashamed of what he is doing.” Lamenting this “yo-yoing” of Cuba policy, Jason Blazakis, a former top official in the US Department of State’s Counterterrorism Bureau, noted that the evidence that Cuba is an SSOT is “flimsy or nonexistent.” In a speech on the Congress floor, Sen. Peter Welch (D-VT) said that the SSOT designation
has caused, directly and indirectly, great hardship for the Cuban people who are currently experiencing the worst poverty in a generation. At the same time, the designation, and the other sanctions imposed by the United States, have achieved none of the intended goals. … President Biden rightly determined there is no evidence that Cuba sponsors international terrorism. … [The] State Sponsor of Terrorism designation has become a transparently political determination, not one based on the facts or the law. … [Even] those who claim Cuba belongs on the list of state sponsors have failed to produce any evidence that it supports acts of international terrorism. … Cuba does not belong on the list of State Sponsors of Terrorism, and by relisting Cuba, the President has ignored the law.
Prior to the revocation, Rep. Maria Salazar (R-FL) introduced a bill that would codify the SSOT designation into law, making any future removal significantly more difficult. Sen. Ron Wyden (D-OR), in contrast, introduced a bill to lift the trade embargo on Cuba, stating that “attempting to isolate Cuba is a failed, outdated strategy that punishes the Cuban people.” A new peer-reviewed econometric study that bolsters this new claim found a “substantial negative impact of sanctions policy shifts on Cuban economic growth,” and that “this impact on GDP is concentrated in the component of household consumption.”
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The Trump administration’s approach to Iran appears to be beginning to take shape: an escalation of sanctions on the one hand, but a willingness to then negotiate a deal on the other. The Financial Times reports that the Trump transition team has drawn up a plan to reinstate “maximum pressure” sanctions and “bankrupt” the country, and Secretary Rubio has confirmed that the administration will work with European allies to ensure the snapback of UN nuclear deal sanctions. However, rather than imposing sanctions for sanctions’ sake, the apparent strategy is to use sanctions as an incentive toward achieving a deal. Trump’s decision to give Steve Witkoff — who reportedly helped secure the latest Gaza ceasefire — the Iran portfolio and the appointment of restraint-oriented Mike DiMino as the Pentagon’s Middle East policy chief suggest a willingness to negotiate with Iran (prompting alarm from some pro-Israel Republicans). The Iranian government has signaled a clear willingness to negotiate as well.
While this apparent openness to dealmaking is welcome news to critics of the status quo, the human consequences of ramping up sanctions could be devastating. Already, since Trump withdrew from the Iran nuclear deal in 2018, the country’s currency has “plummeted twentyfold, while wages have increased less than eightfold,” reports the London-based Iran International news outlet. Inflation, in turn, has averaged 40 percent over the last five years, pushing millions into poverty and further squeezing the country’s disappearing middle class. While sanctions advocates often deny that their policies harm Iranian civilians, it is difficult to reconcile this claim with stated plans to “bankrupt” the country and national security advisor Mike Waltz’s open calls to further destabilize the currency. “Just four years ago … their currency was tanking, they were truly on the back foot. … [W]e need to get back to that posture,” Waltz said at an Atlantic Council event.
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The outgoing Biden administration sanctioned two individuals and four entities from North Korea for allegedly “generating illicit revenue for the Democratic People’s Republic of Korea (DPRK) government,” a US Department of Treasury press release said. Those sanctioned allegedly make up a “network that consists of a DPRK government weapons-trading department, two of its front companies that employ DPRK IT workers in Laos, two DPRK leaders of those front companies, and a Chinese company supplying the DPRK government with electronics equipment.” Japan also targeted entities and individuals linked to North Korea in a broader package of sanctions against Russia.
During Secretary of State Rubio’s confirmation hearing this month, Senator Brian Schatz (D-HI) criticized the US’s current approach to North Korea, including sanctions, calling it “broken” and ineffective in stopping the country from pursuing nuclear capabilities. Rubio seemed to agree, potentially endorsing a rethinking of North Korea policy and saying that North Korean leader Kim Jong Un “views nuclear weapons as his insurance policy to stay in power. It means so much to him that no amount of sanctions has deterred him from developing that capability.” President Trump has also signaled he may restart diplomatic efforts with North Korea.
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On January 10, the Biden administration introduced its broadest sanctions yet on Russia’s oil and gas sector, targeting more than 200 entities and individuals along with 180 vessels in Russia’s “shadow fleet” of oil tankers. The measure, which the administration had previously avoided due to concerns about rising oil prices, caused oil prices to surge to their highest level in five months. The International Energy Agency said the sanctions would “significantly disrupt the country’s oil supply chains … potentially threatening the global market,” according to Reuters. Indeed, countries such as India, which have been importing large quantities of Russian oil, may see major disruptions as a result of the move. Among the targets was Serbia’s sole refinery and largest oil company, which is majority-owned by Gazprom, Russia’s state-owned oil and gas giant. The Biden administration followed up by sanctioning over 150 individuals and entities in Russia’s defense sector on January 15. In addition, President Biden ordered the reclassification of approximately 100 entities from Russia’s finance, energy, and defense sectors, which were already subject to sanctions, under a different legal framework. This change enables Congress to block the lifting of sanctions, making them harder to reverse. Subsequently, President Trump threatened to impose sanctions on Russia if President Vladimir Putin refuses to negotiate an end to the war in Ukraine.
Across the Atlantic, the European Union began disbursing to Ukraine its portion of a $50 billion G7 loan backed by profits from frozen Russian assets. Even so, European Commission officials — with US support — are continuing discussions on fully confiscating Russia’s assets, despite legal concerns from member states and questions about the G7 loan’s financing. Meanwhile, Hungarian Prime Minister Viktor Orban threatened to veto the renewal of EU sanctions on Russia, arguing that the measures harm European economies and calling for a “sanctions-free relationship with the Russians,” though he ultimately backed down and the measures were renewed. European officials have also been discussing a new, 16th package of sanctions on Russia.
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Early this month, the Biden administration issued to Syria General License 24, authorizing transactions with Syrian governing institutions for six months — despite being controlled by designated terror organization Hayat Tahrir al-Sham (HTS) — along with certain transactions related to the flow of energy and remittances. The bulk of US sanctions, however, remain. The European Union has reportedly gone further, agreeing to a plan for the gradual lifting of sanctions on Syria, provided certain conditions such as respect for the rights of women and ethnic minorities are met. UN Special Envoy for Syria Geir Pedersen welcomed the moves but noted that “much more significant work in fully addressing sanctions and designations will inevitably be necessary,” later adding decisively that “we need to see an end of sanctions.”
Such calls are increasingly widespread. Speaking to the World Economic Forum in Davos, Syria’s new finance minister said that “the big challenge is economic sanctions. We inherited a lot of problems from the Assad regime … but removing economic sanctions is key for the stability of Syria.” The Syrian American Council, which took part in an International Day of Solidarity for Syria Sanction Relief, said that “lifting sanctions will help build a better, more stable Syria.” Writing in Foreign Affairs, top International Crisis Group experts lamented the failure of economic isolation to influence the Taliban government in Afghanistan, arguing that the same mistakes should not be repeated in Syria: “In the absence of decisive action from international actors, Syria is poised to descend further into crisis, as Afghanistan did. To avert this fate, foreign governments must quickly stop sanctions from driving Syria into a deeper economic and humanitarian emergency.” Similarly, former US advocacy advisor for Crisis Action Anastasia Moran writes in Foreign Policy that “there is a clear moral imperative to alleviate human suffering. Maintaining the status quo of economic isolation punishes Syrians for a government they did not choose and that no longer exists.”
A Washington Post exposé reveals just some of the human suffering caused by these sanctions: “American and European Union sanctions aimed at punishing the regime of President Bashar al-Assad have weakened the medical system that millions of Syrians rely on — preventing hospitals from maintaining or importing lifesaving diagnostic machines and making it more difficult to provide timely treatment to the wounded and the sick.” Notably, while the overthrow of the Assad government has only now created the political will for the easing of sanctions, Syrian civilians have been suffering their consequences for years.
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The US, UK, EU, and Canada imposed coordinated sanctions on Venezuela in the hours following president Nicolás Maduro’s inauguration for his third term. The sanctions target members of the National Electoral Council and security forces, heads of the state-owned oil company, the state airline, and more. The Biden administration also increased its outstanding reward for information leading to Maduro’s arrest. The Trump administration has continued Biden’s policy of asserting that Edmundo González is the “rightful president,” though they have stopped short of recognizing González as president. Beyond this, it remains unclear how the administration plans to approach Venezuela, though envoy for special missions Richard Grenell has reportedly spoken to Venezuelan officials, posting on X that “Diplomacy is back.” Maduro has previously described Trump’s second term as a chance for “a new start.”
As noted in POLITICO, “Cracking down further on the Maduro regime could complicate Trump’s ability to deliver on some key campaign promises, including on immigration and energy. … The administration needs Venezuela to begin accepting deportations. … On the energy front, restricting export licenses for oil companies like Chevron, or even instituting a total embargo on Venezuelan oil, would cut the U.S. off from the biggest oil reserves in the Western Hemisphere.” Indeed, CEPR Senior Research Fellow Francisco Rodríguez has published new research finding that, of the 7.7 million Venezuelans who left the country as a result of its economic and political crisis, roughly “4.1 million did so as a result of the economic deterioration cause [sic] by sanctions and toxification effects.” The report further estimates that a return to maximum pressure would result in the emigration of an additional one million Venezuelans in the next five years.
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On January 17, Israel and Hamas reached a 42-day ceasefire agreement that included a halt in fighting, the release of hostages, and the delivery of humanitarian aid to Gaza. Prior to the agreement, Gazans — especially those in the North, which had been under a total siege — faced an impending famine primarily caused by Israeli restrictions on aid. An article in Le Monde reported: “A web of obstacles systematically blocks humanitarian aid flows. … In December, NGOs were only able to bring in 70 trucks of goods per day, compared to 500 before the war. This situation has led to famine in the territory, and is a result of restrictions imposed by Israel and its inaction on looting gangs, according to the United Nations and other organizations.” In a statement on January 17, Oxfam said, “during the conflict, the entire population in Gaza hasn’t had enough food. Children are dying of malnutrition and dehydration. The price of foods … has increased dramatically.”
Six days after the implementation of the truce, over 2,400 aid trucks had reached Gaza, but humanitarian organizations warned that the need for assistance remains enormous. AFP reports, “The United Nations’ humanitarian chief Tom Fletcher called [the ceasefire] ‘a moment of hope and opportunity’ but said ‘we should be under no illusions how tough it will still be to get support to survivors.’” Journalist Emma Graham-Harrison wrote in The Guardian, “A provision to increase the aid entering Gaza under the ceasefire is welcome but insufficient, and shows Israel could have allowed more food, medicine and other supplies into the strip during the war, humanitarian and legal experts have said.”
Meanwhile, newly passed Israeli legislation essentially 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 is set to take effect on January 31, though it is still unclear what will happen in practice. UNRWA’s head said it would continue to provide aid without communication or cooperation with Israel at considerable risk “due to the exceptionally hostile operating environment created by the Government of Israel’s disregard for international law and fierce disinformation campaign against the Agency.” The UN Secretary-General and the head of the World Health Organization emphasized that UNRWA’s unique role is irreplaceable, while a senior UNRWA official warned that social order in Gaza could collapse if Israel were to end all cooperation with the agency. Additionally, the US Department of State reportedly cautioned President Trump’s transition team that the law’s implementation could result in a humanitarian “catastrophe.”
Upon assuming office, President Trump issued an executive order rescinding the Biden administration’s sanctions on certain Israeli settlers in the occupied West Bank who have engaged in violence and land grabs against the local Palestinian population. Weeks earlier, the House of Representatives passed a bill — which UN experts have urged the Senate to reject — imposing sanctions on the International Criminal Court (ICC) after the court issued arrest warrants for Israeli prime minister Benjamin Netanyahu and other senior members of his government over alleged war crimes and crimes against humanity in Gaza. President Trump similarly rescinded a Biden-era executive order that had ended a “national emergency” declared during Trump’s first term, which had enabled sanctions on the ICC. This move may be a signal that Trump intends to reimpose sanctions on the international judicial body, which has reportedly already taken steps to protect itself.
Colombian president Gustavo Petro ordered a ban on US planes carrying deported Colombian migrants from landing in the country on January 26, criticizing the practices as degrading. He also blamed US sanctions on Venezuela for triggering the migration of millions of people. President Trump responded by threatening to impose 25 percent (and later 50 percent) tariffs on Colombian products, travel bans, visa revocations for Colombian officials, and extensive sanctions. Petro then threatened 25 percent tariffs on US products. Later that day, the two countries reached an agreement, with Colombia agreeing to accept migrant flights. However, the US warned that the retaliatory measures would be implemented if Colombia failed to uphold the deal.
Outgoing Deputy National Security Advisor for International Economics Daleep Singh outlined his position on principles for “economic statecraft” — primarily sanctions. Among other things, Singh emphasized the risk of global economic fragmentation, the perception that such measures are “arbitrary or illegitimate” and thus likely to push countries from the US orbit, and the risk of escalatory tit-for-tat economic warfare. Singh thus recommends five guiding principles:
Singh goes on to propose creating a new cabinet position on sanctions, expanding the quite minimal governmental infrastructure for assessing the efficacy and consequences of sanctions, and even creating an “Economic Geneva Convention … to avoid creating a fractured economic system that damages lives and livelihoods across the world.”
Such principles, while falling far short of a full reckoning with the severe humanitarian consequences inherent to broad economic sanctions and in many cases their illegal, unilateral nature, would mark a dramatic departure from the status quo, including the approach largely pursued during the Biden administration, in which economic sanctions were regularly imposed indiscriminately with little regard for humanitarian consequences, efficacy, or strategic outcomes.
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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.
Previous editions of the Sanctions Watch can be found here. CEPR’s US Sanctions Policy FAQ can be found here.