Letter from Washington — From the September 2013 issue

A Very Perfect Instrument

The ferocity and failure of America’s sanctions apparatus

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During the Cold War, the United States deployed sanctions and embargoes on a routine basis to punish countries that had earned Washington’s disfavor. The Cubans were embargoed for having a revolution and rejecting U.S. supervision. The Vietnamese were embargoed for having the temerity to win the Vietnam War — and after the Vietnamese army ejected the genocidal Khmer Rouge from Cambodia, U.S. sanctions were brought to bear on that country too, down to school pencils. Sanctions also crushed the economy of Sandinista-ruled Nicaragua, where household goods such as toilet paper became virtually unobtainable.

Thanks to the Cold War standoff between the United States and the Soviet Union, countries subject to American sanctions, most notably Cuba, could survive on trade and aid from the communist bloc. The fall of the Berlin Wall altered this equation. The United States was suddenly free to enforce peacetime sanctions quite in the spirit of 1919. Today, as America’s armies of occupation fly home and defense budgets get squeezed, such sanctions have in fact become our principal tool for global enforcement.

This tool has turned into a “machine unto itself,” claims Vali Nasr, who served in the State Department during Obama’s first term and is now dean of the Johns Hopkins School of Advanced International Studies. “It becomes a rote habit,” he says, “operated by a bureaucracy that is always looking to close that last loophole. Pressure becomes the end, not the means.” The roster of the twenty-three separate U.S. sanctions programs ongoing today — a living memorial to the national-security preoccupations of past decades — tends to support Nasr’s contention, ranging alphabetically from the Balkans to Cuba (on the list since the Kennedy Administration) to Zimbabwe.

The Iraq Stabilization and Insurgency Sanctions Regulations are on the list, too, though sanctions on Iraq supposedly ended with the 2003 invasion. (There are still Americans in jail for violating them.) Iran has been targeted ever since the takeover of the U.S. Embassy in 1979, when David Cohen, now the Treasury Department’s undersecretary for terrorism and financial intelligence and the overall supervisor of American sanctions operations, was in high school. In consequence, Iran has lost 60 percent of its oil exports; it is not free to spend the money earned from remaining oil sales; it cannot insure its tankers; it has almost no access to the international banking system. Its economy is shrinking and inflation is gathering speed.

Though food and medicine are theoretically exempt from this blockade, Iranians face huge obstacles in importing them. Three thousand Iranian cargo ships are stranded. The dragnet is global. An American who inherits an Iranian business, for example, risks arrest for violating sanctions. Individuals face jail time for exporting medical equipment to Iran or investing in an Iranian certificate of deposit. Costco recently acknowledged that it had allowed six employees of targeted Iranian institutions in Japan and Britain to buy its deeply discounted goods — a clear violation of sanctions — and duly struck them from its membership rolls.

Elsewhere, Syrians shivered for much of last winter because sanctions had halted supplies of home heating oil. Lebanese banks, a traditional refuge for Syrian capital, have been threatened as well. Despite its recent elevation in U.S. favor, Burma still finds itself facing sanctions, either active or threatened. The system is enforced with punitive rigor. In sharp contrast to the benign treatment meted out to Wall Street banks following the 2008 crash, fines for sanctions infractions have risen to the hundreds of millions for foreign banks caught transferring Iranian payments.

Just as air power has evolved from the area bombing of entire cities during World War II to “precision” drone strikes, so the theory and practice of sanctions has evolved from straightforward blockades into a more ambitious and intricate system known as “conduct-based targeting,” aimed at the economic paralysis of thousands of designated “entities” — people, companies, organizations. Drone operations attract widespread comment, inquiry, denunciation. Our modern economic warfare, though it bends the global financial system to its ends and can blight entire societies, operates well below the radar, frequently justified as a benign alternative to military action.

is the Washington editor of Harper’s Magazine. He writes frequently on defense and national affairs, and is the author, most recently, of Rumsfeld: His Rise, Fall, and Catastrophic Legacy.

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