Sanctions regime mushrooming        

Basic information on sanctions and trade wars is available on this website, in the section: sanctions and trade wars. There can be found even such a fact that the US has utilized so much sanctions in its foreign policy during recent years that the US is now at odds with the majority of the whole humankind.

Definition of sanctions

By sanctions, it is meant a set of financial, trade, visa and other restrictions imposed for political purposes. The overall aim of the sanctions is to disrupt the target economy in such a manner that it will cause the country’s leadership to radically change its foreign policy course. Sanctions can be understood as an attempt to limit or influence the sovereignty and sovereign political course of another country through economic punitive measures.

In terms of international law, the UN Security Council is the only legitimate body with the legal authority to introduce sanctions. In practice, however, individual countries or coalitions of countries widely use sanctions unilaterally. As a rule, the United States has always been the primary sender of sanctions but since the end of the Cold War, it has been joined by the European Union as well.

Trump / Biden sanction policy

The Trump Administration has issued about 3,800 sanctions since 2017, about 40 percent more than Obama ordered in his second term. Critics of the sanctions policy have long argued that they do not work, causing the leaderships of affected nations to sharpen their opposition to the US.

Obviously, President-elect Joe Biden will recalibrate America’s sanctions policy, increasing pressure on some countries while easing off others. A review of the sanctions policy is expected to take place soon after the 20 January inauguration. Adewale Adeyemo, Biden’s pick for deputy treasury secretary, is expected to lead the reassessment. Adeyemo announced earlier this month that the US would continue to use sanctions broadly “to hold bad actors accountable.”

Russia is expected to be hit with more sanctions, with Biden likely to follow in the UK and EU’s footsteps on measures related to the Navalny case, alleged Russian election meddling and cyberattacks, which all are potential reasons Moscow can expect further punishments.  Biden is expected to widen sanctions against China as well, with new restrictions to target Beijing over Hong Kong, the Uighur situation in Xinjiang and possibly Tibet affair. North Korea may also see sanctions against it ramped up.

The US vs China & HK

In early January 2021, US Secretary of State Mike Pompeo said that Washington is looking to slap sanctions on Chinese state agencies and officials over the arrest of more than 50 pro-democracy activists in Hong Kong. China, for her part, told that the US will have a “heavy price” to pay for its threats to censure Chinese officials over Hong Kong detentions. The foreign ministry’s representative, who also condemned Washington’s plans to send a UN ambassador to Taiwan, called on the US authorities to immediately halt interference in China’s internal affairs.

In late June 2020, China adopted legislation that bans separatist and terrorist activities in Hong Kong as well as any type of outside meddling. While opponents of the law both in Hong Kong and abroad see it as a violation of freedom, Beijing has emphasized that it aims to punish illegal activities without encroaching on the local population’s rights.

Biden team’s new potential Russian sanctions

Washington has been threatening to disconnect Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for years, with the threats going back to the Obama era. Moscow has responded by creating a domestic alternative to the payment system known as the SPFS, a Russian acronym for “System for Transfer of Financial Messages.”

Around year-end 2020, President-elect Joe Biden’s team is considering several options to punish Russia for its suspected role in the unprecedented hacking of US government agencies and companies once he takes office. Biden’s team is considering financial sanctions, cyberattacks on infrastructure and possibly even shutting Russia off from SWIFT in response to a massive cyberattack on US federal government agencies. Biden has blamed on Moscow but has not present any evidence proving Russia’s culpability.

Disconnecting Russia from the SWIFT payments system would create temporary problems for Moscow, both in international settlements and foreign exchange markets but according to the analyst, Russia can adapt to the new restrictions rather quickly. Russia already has a backup alternative in the form of SPFS, where hundreds of Russian institutions have already connected to and in 2019 the Russian Central Bank announced that eight foreign banks had joined as well. Russia is also studying to launch a digital rouble whereupon the need to rely on an international payments system could disappear altogether.

The US strikes China’s and Russia’s high-tech industries in December, 2020

The US has tightened export controls over its technologies, which the US delivers/ transfers to Russia, China and Venezuela. The US Department of Commerce has blacklisted 58 Chinese and 45 Russian companies and departments as “military end users.” In a nutshell, the companies are allegedly associated with the Chinese/Russian Ministry of Defense, which stops them, according to the Export Control Rules, from buying a wide range of US-made goods and technologies.

In fact, US individuals and legal entities are now not allowed to export, re-export or otherwise transfer blacklisted goods and technology without the express permission from the US government. For example, if American technologies or components are used in the projects of blacklisted Russian/Chinese companies, the suppliers will be required to obtain a special license from the US Department of Commerce or withdraw from such projects.

US sanctions on Turkey

In mid-December 2020, the US authorities, as part of the Countering America’s Adversaries Through Sanctions Act (CAATSA), imposed sanctions on the Turkish Defense Industry Administration, its chief Ismail Demir and three other citizens of the Turkish republic. In addition to visa restrictions and blocked assets of the above-mentioned Turkish officials, the US has restricted the issuance of US export licenses and permits for the transfer of any goods and technologies to the Turkish defense industry. Secretary of State Mike Pompeo said:

“The United States made clear to Turkey that its purchase of the Russian S-400 system would endanger the security of US military technology and personnel and provide substantial funds to Russia’s defense sector, as well as Russian access to the Turkish armed forces and defense industry”.

According to Turkish analysts, Turkey may ask the Americans to leave the Incirlik airbase in Adana province in response. The US and Turkish Air Forces have been operating the airbase for decades; it still remains an important forward base for Pentagon and NATO operations in Iraq and Syria. On the other hand, American sanctions and European pressure on Turkey could seriously backfire in other ways as well. Turkey may turn more fully to become a major client for Russian aerial warfare systems. If Biden’s new administration fails to improve relations and relax sanctions, the primary beneficiary will be Moscow, which could see billions of dollars new Turkish contracts bolstering its defense industry sector.

New sanctions and counter-measures

In mid-December 2020, Moscow announced the right to take tit-for-tat measures in response to the UK’s new anti-Russian sanctions. Russia was bewildered over the UK government’s decision announced on December 10 on imposing national sanctions against three Russian citizens and a unit of the National Guard for allegedly abusing human rights in the Chechen Republic. December 12, 2020, Russia and Iran will look for new methods of countering the negative effect of sanctions on bilateral economic relations, increase national currencies in settlements and set up new creative schemes of economic interaction. Russian Foreign Minister Sergey Lavrov stated that the post of the special rapporteur on illegitimate unilateral economic sanctions has been set up at the UN.

In November 2020, Moscow imposed new sanctions in response to the EU’s punitive measures over the alleged Navalny poisoning. These sanctions are aimed at members of the French and German administrations. Russian Foreign Minister Sergei Lavrov called Germany’s behavior in connection with the poisoning of opposition leader Alexei Navalny unacceptable and inconsistent with international obligations.

Sanction costs to the EU so far over 120 billion EUR (2015-2020)

December, 2020. The sanctions that the European Union imposed on Russia over the 2014 events in Ukraine cost the EU economy EUR 21 billion per year, according to the Dusseldorf Chamber of Commerce and Industry. “The sanctions on Russia cost the German economy EUR 5.45 billion per year and the European Union’s losses are estimated at EUR 21 billion,” Managing Director of the Dusseldorf Chamber of Commerce and Industry Gregor Berghausen said, commenting on research by the Munich-based Ifo Institute for Economic Research.

EU to approve sanctions regime similar to Magnitsky Act, in December 2020

Earlier in autumn, President of the European Commission Ursula von der Leyen informed that an act similar to the Magnitsky Act, which targets a number of Russian officials, is being developed by the EU and in late November the EU is going to approve a similar sanctions regime.

The Sergei Magnitsky Rule of Law Accountability Act was passed by the US Congress and signed by then-President Barack Obama in December 2012. The law particularly specified sanctions against a number of Russian officials, including law enforcement officers, believed by Washington to have played a role in the death of Sergei Magnitsky, an auditor at the Hermitage Capital Management company, who died in a Moscow detention center in November 2009.

Nord Stream 2 – final battle to the bitter end

Nord Stream-2 gas pipeline has become an extraordinary case of the US ever-tightening sanctions regime. Despite President Trump’s veto of the National Defense Authorization Act of which the Nord Stream-relevant sanctions formed part, the US Congress overrode his decision, thus activating a new round of targeted sanctions from December 29, 2020 onwards. From now on, any entity, be it Russian or European, that helps build Nord Stream 2, might be subject to sanctions. Though the new sanctions package provides for a 30-day wind-down period, most European companies providing a technical assessment of Nord Stream-2 will cease any sort of cooperation with the pipe-laying vessels and Gazprom.

The European Union has so far refrained from robust political steps vis-à-vis the US Administration against what it perceives to be meddling in its internal affairs. Germany’s financial leaders support the project, stating that canceling Nord Stream-2 would not only hurt European customers and consumers but would also damage the financial standing of the top oil and gas majors involved in the project. Against such a geopolitical landscape, the US should find an elegant way to avoid acknowledging the failure of its multi-step sanctions-tightening.

It took more than a year to break the Nord Stream 2 stalemate (stop of pipelaying) and now Gazprom has restarted pipelaying operations again. The Fortuna pipelaying vessel has finished working on the NS2 section in Germany’s exclusive economic zone (EEZ) and now it is only the Danish EEZ that remains to be laid. The next round of US sanctions goes into effect indicating that the pipeline’s endgame will take place in the upcoming 3-4 months.  Fortuna would start pipe-laying in Danish territorial waters from January 15, 2021. There remain some 120km to be laid in Danish territorial waters and due to the difficult weather conditions, it would be expected the completion of pipelaying works in May 2021.

December, 2020. The US Congress has recently approved the annual Defense Authorization Bill, which among other things included a fresh bunch of sanctions targeting the joint pipeline project by Russia’s Gazprom and several European energy giants, after previous measures failed to thwart its construction. The Nord Stream 2 pipeline “will never carry Russian gas” an anonymous Trump administration official told the German agency DPA in an interview.

The US administration has been pressuring the EU to drop the Nord Stream 2 project with Russia despite many of these same nations and European energy giants being interested in the construction of the pipeline, which will double the amount of gas that Russia can sell to Europe. Natural gas plays an essential role in the EU’s plans for transitioning to green energy by the middle of the century.  Washington claims that Moscow will use the pipeline as leverage, but Germany, one of the main champions of the project, insists that it’s purely economic and not a political venture.

German businesses group asked US Democrat Lawmakers to lift sanctions on Nord Stream 2, November 2020. An influential group of German businesses has written a letter to Democrat lawmakers urging them to reject sanctions against the Nord Stream 2 gas pipeline project. The letter notes, however, that German businesses are concerned about plans by Democrat lawmakers “to introduce new, extraterritorial sanctions against the Nord Stream 2 project at the expense of European companies even after Joe Biden’s successful election campaign.”

Nord Stream 2 is the first test case for a potential rapprochement between Europe and the United States under a Biden presidency, and the letter to Democrat lawmakers was an indication that German businesses are hoping that a change of government in Washington will help ‘defuse the bitter dispute’ over the energy project.

Earlier in November, Die Welt reported that Germany and the United States would soon face a “decisive battle” on the energy project. Before that, an analysis by Bild suggested that Biden might be even tougher than Trump on Nord Stream 2, and seek to “bury” it at all costs. Bundestag Economic Affairs and Energy Committee head Klaus Ernst said that Berlin should be prepared to issue countersanctions against Washington if the latter moves forward with new restrictions against Nord Stream 2.

US to sanction entities linked to Iran’s nuke programme

In November 2020, the US targeted dozens of individuals and entities in a new round of Iran-related sanctions. The sanction regime has been stepped up since 2018, after US President Donald Trump abandoned the JCPOA. The US intends to blacklist four Russian and Chinese entities for their alleged links to Iran’s missile programme, US Special Envoy for Iran Elliott Abrams said at a virtual Beirut Institute event. Washington will continue to punish Iran with sanctions, adding more pressure over the coming weeks, through December and January, Abrams said. Iran roundly condemned the statement, saying that the US policy of maximum pressure has turned into a “maximum failure”.

Venezuela is again selling oil to China, as Trump has lost interest in regime change

In November 2020, Venezuela is reportedly exporting oil again. Despite crushing US sanctions having been imposed on the nation with a view to forcing regime change, Caracas has started shipping crude to China for the first time in a year. The timing of the move is probably not a coincidence. Donald Trump is on the way out and Venezuela is probably low down in his priorities or no more an issue of urgency on the US policy agenda.

Almost two years after the White House declared opposition leader Juan Guaido the “interim president” of the country and vowed to squeeze Nicolas Maduro out of power, nothing has happened and all the evidence points towards Trump virtually giving up. While the country has suffered economically, the regime has survived intact. Even the numerous EU countries joined this American regime change operation by declaring Juan Guaido as a president. Venezuela is now seizing its moment to act again.

China imposing sanctions on US military-industrial giants

In late October 2020, China vowed to make “necessary response” after the US approved $ 1,8 bn arms sale deal to Taiwan, by targeting US arms producers with sanctions. The Pentagon approved the deal in mid-October infuriating Beijing. The US plans to deliver three weapon systems include truck-based rocket launchers produced by Lockheed Martin, Boeing AGM-84H long-range air-to-ground missiles and external sensor pods for F-16 jets, which are manufactured by a subsidiary of Raytheon Technologies. The three US defense giants will be sanctioned by the Chinese government if the deal goes through in the Congress. China opposes any weapon sales to Taiwan, which it considers to be under its sovereignty, saying these supplies destabilize the regional balance of power.

In September 2020, China released its own export blacklist which may prohibit exports or business with companies that are deemed a threat to national security, deliberately mirroring that used by the US Department of Commerce against Chinese companies. The aim is to leverage its own market against countries that discriminate against, or hurt the interests of, Chinese firms.

US Senate bill threatening China with sanctions over Covid-19

In May 2020, the US Senate introduced “The COVID-19 Accountability Act”, which would require the President to notify Congress within 60 days that China had “provided a full and complete accounting” to any US-led probe into the coronavirus outbreak. The rule would also apply to investigations carried out by American allies and UN agencies such as the World Health Organization (WHO).

The legislation also demands that China close all “wet markets” (live poultry markets, farmers’ markets, or seafood markets), which can pose a risk to human health. It also calls for the immediate release of Hong Kong activists arrested during ongoing protests in the semi-autonomous territory. If China fails to meet these criteria, the bill would authorize the president to implement far-reaching sanctions. Beijing has lashed out at US legislation which seeks to impose sanctions on China if it fails to cooperate with Washington’s investigation into the coronavirus pandemic. Foreign Ministry spokesperson Zhao Lijian calls it immoral and underlines that the proposed legislation was not based on facts or international agreements.

US sanctions cementing Russian, Iranian and Chinese Influence on Syria’s geopolitical orientation.

The US Caesar Act (Syria Civilian Protection Act) came into force in June 2020, imposing sanctions on 39 Syrian officials including President Bashar al-Assad and his wife and envisaging penalties against any global actor that does business with Damascus. Besides this, there are a long list of sanctions against Syrian economy and the latest batch of sanctions is targeting those engaged in reconstruction activities in the war-torn country.  The US has focused on implementing sanctions since other means have failed thus far to achieve Washington’s primary goal – regime change in Damascus.

The US has instrumentalized its sanctions policy against Syria for decades and gradually stepped up the restrictions since the beginning of the civil war in 2011. These series of sanctions imposed by the US, the EU, Canada, and Turkey on Syria over the several years pose a serious challenge to the country amid the coronavirus pandemic as they prevent Syria from procuring medical equipment.

Some American political experts (Stratfor, an American geopolitical intelligence platform) have criticized that White House’s Syria sanctions policy will keep the Syrian Arab Republic “firmly in Russia and Iran’s corner”. In fact, the geopolitical impact may be even bigger because of China’s increasing position in the region. Meanwhile, the robust sanctions on Syria cause a knock also on the economies and the people of Lebanon, Iraq, Jordan and Kurdish region, as these regional economies are interconnected and dependent on each other.

The US has threatened with the Caesar Act: anyone who engages in economic activities with Syria may be targeted by these sanctions. It appears that reconstruction and investment in Syria will be solely from Russia, Iran, China and some other countries, because this Act will further cement those states’ influence on the geopolitical orientation of Syria.

US lawmakers approved new Hong Kong-related sanctions, after Beijing imposed a HK security law, in July 2020 

China imposed the new Hong Kong security law and noticed it was necessary to stop the type of protests seen in Hong Kong during 2019. Despite widespread international condemnation from leading powers, more than 50 countries led by Cuba supported China at the UN. Under the new law, inciting hatred of China’s central government and Hong Kong’s regional government are offences.  Acts including damaging public transport facilities – which often happened during the 2019 protests – can be considered terrorism. Chinese officials hit back at foreign critics, saying Hong Kong’s affairs were “none of your business”.

The US new sanction measure was passed unanimously by both the House and the Senate, in July 2020. It has been sent to President Donald Trump to sign into law. The Hong Kong Autonomy Act imposes sanctions on banks that do business with Chinese officials who are involved in cracking down on pro-democracy protesters in Hong Kong. Before the bill was signed, the US had already begun eliminating Hong Kong’s special status – halting defense exports and restricting the territory’s access to high-technology products. Last year, the US also signed into law the Human Rights and Democracy Act, supporting pro-democracy protesters in Hong Kong.

Beijing to strike back at new US actions against Chinese diplomats

In September, 2020, US Secretary of State Mike Pompeo said that China’s New York consulate general is being used as a major hub for the nation’s US espionage efforts and more Chinese diplomats and agents will likely be arrested. This is the latest US threat to escalate the diplomatic conflict between China and the US. Many analysts believe the Trump administration will create more sensational but controllable China-US tensions before the election to make more Americans believe that all US problems and disasters come from China. 

US ready ‘to block Russia & China’ if they disregard Iran sanctions

In August 2020, The US Secretary of State Mike Pompeo said that the United States is prepared to block Russia and China if they refuse to reimpose UN sanctions on Iran. The statement came a day after Britain, France and Germany – who are still party to the Iranian nuclear agreement – joined Beijing and Moscow in rejecting the US push for a “snapback” of UN sanctions against Tehran. The Trump administration withdrew from the 2015 nuclear deal – the Joint Comprehensive Plan of Action (JCPOA) – two years ago, after accusing Iran of violating the agreement.

Russian Deputy Foreign Minister Sergey Ryabkov described US statements urging the reimposition of UN sanctions against Iran as absurd, adding that Washington has no legal or political grounds to do so. Ryabkov also warned that such a step could result in a crisis at the UN Security Council. China’s Foreign Ministry agreed that the US had forfeited its right to request the restoration of the UN sanctions regime against Iran when it withdrew from the JCPOA.

Sanctions regime mushrooming, “me-too”

As the above examples tell a stark story of present great power relations, nothing good can be expected in the short or mid-term future. On the contrary, there is no light in sight at the end of the tunnel, perhaps there is no light at all and even the very existence of the tunnel end can be put in question. Hopefully, we may not find ourself in a dead end.

Even the EU, in its “Great Wisdom”, has found the sanctions regime as a useful tool in international relations as if this would be a certain “me-too” campaign. The Commission seems not realize that by proceeding this way, the whole EU discloses its real vassal-master relation with respect to the US.

Wrapping up, the international atmosphere right now is so toxic and tense that no mitigation or rapprochement is in sight, not to mention any political thaw on the international scene.

So much has been used “scorched earth tactic“, that it is turning more and more into “scorched earth strategy“.