CEPR Sanctions Watch September 2023

September 29, 2023

In this edition of Sanctions Watch, covering September 2023:

  • One year since the creation of the “Afghan Fund,” the people of Afghanistan have yet to see any of their assets;
  • Senator Bob Menendez, a leading proponent of the embargo against Cuba, is indicted for corruption;
  • The US and Iran complete a prisoner-swap and asset release deal as tensions ease slightly;
  • The US threatens “aggressive” sanctions enforcement as North Korean leader meets with Putin;
  • Putin says Russia will return to Black Sea grain deal only if agricultural sector sanctions exemptions are enforced;
  • Leading UN expert on human rights in Syria calls to reconsider unilateral sanctions;
  • Three billion dollars in frozen Venezuelan assets is reportedly set to be released to a UN-managed fund;
  • Heads of state condemn unilateral sanctions as illegal and harmful at the UN General Assembly, and more.

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Background: Since the Taliban takeover in 2021, the Biden administration has 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. Around $2 billion have also been blocked by European authorities. Along with a cutoff of aid, and sanctions on Taliban officials, this asset seizure has contributed to a collapse of Afghanistan’s economy.

This month marked one year since President Biden announced the creation of the Afghan Fund, a trust that holds $3.5 billion in Afghan central bank assets that were frozen by the United States following the Taliban takeover. In that time, the Fund, in which the United States has an effective veto, has not made one disbursement of cash, and is reportedly no closer to releasing the Afghan central bank’s assets. Though the economic situation has improved very slightly, the country is still experiencing a “famine equilibrium,” in which most Afghans can’t meet their basic subsistence needs without robust humanitarian assistance. Even humanitarian aid may soon be at risk due to declining international commitments that have led, for instance, to the World Food Programme cutting two million Afghans off of food aid this month in a country where “more than one-third of the population go [sic] to bed hungry every night.”

The Central Bank’s lack of access to its international assets, and other economic sanctions, continue to take their toll. Two legal experts point to sanctions in a piece for Al Jazeera, noting they “have led to an increase in illicit activities” and are the “biggest hurdle” to Afghanistan making productive use of its mineral wealth. Equal Times reports how sanctions have made life harder for Afghan women entrepreneurs already facing brutal repression from the Taliban government. The US Institute for Peace notes that “the crisis will not abate until the underlying economic drivers are addressed,” and points to the need to work toward the “eventual return of frozen Afghan assets.” The UN High Commissioner for Human Rights has called for “concrete efforts to restore the financial systems” of Afghanistan, and at the UN General Assembly, the president of Uzbekistan noted that “Ignoring, isolating and imposing sanctions only exacerbates the hardships faced by the ordinary Afghan people.”

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Background: The US embargo against Cuba is one of the oldest and strictest 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 the Biden administration has, for the most part, maintained.

Senator Bob Menendez of New Jersey was indicted on corruption charges this month, forcing him to step down as chair of the Senate Foreign Relations Committee, and leading to a majority of Democratic senators and others to call for his resignation. A leading proponent of sanctions, the Cuban-American senator had long used his position as chair to prevent any easing of the embargo against Cuba. Reacting to the news, former Obama administration official Ben Rhodes pointed out the irony in the charges:

Menendez has had a de facto veto on US Cuba policy, piling sanction after sanction on an impoverished people wrapped in the language of democratic values while apparently supporting the Egyptian dictatorship for personal gain. A little too on the nose … Maybe we can now return to a rational, humane Cuba policy that actually helps the Cuban people …

The last time that Menendez temporarily stepped down as chair — the result of a different federal indictment in 2015 — Obama succeeded in gaining Senate approval to remove Cuba from the State Sponsors of Terrorism list two weeks later. (President Trump later returned Cuba to the list, where it remains today.)

The Biden administration is reportedly preparing to make it easier for Cuban small business owners to access financing. Though a relatively small step materially, the change may signify an increased willingness from President Biden to deviate from the hard-line policies of his predecessor. Meanwhile, at the High-Level Week of the UN General Assembly in New York, many national leaders condemned unilateral sanctions generally, and the embargo against Cuba specifically, from the Caribbean (e.g., Saint Vincent and the Grenadines, Antigua and Barbuda) to Latin America (e.g., Brazil, Chile, Honduras) to Africa (e.g., South Africa). In Bolivian president Luis Arce’s words:

A clear example of these [unilateral coercive] measures is the illegal, inhumane, and criminal economic and financial blockade imposed by the United States against Cuba. The imposed restrictions have made it difficult to access food, medicine, and other basic goods, causing human suffering and impacting their economy and development.

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Background: US sanctions on Iran began during the 1979 hostage crisis, and currently bar US actors — plus some non-US actors — from almost all trade and financial transactions with Iran. Though 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 United States and Iran completed a prisoner swap arrangement that had been agreed to in August, with each country freeing five prisoners, and $6 billion in frozen Iranian assets released to a Qatari-administered fund to be used strictly for humanitarian purposes. The move was applauded by groups including the National Iranian American Council and the Friends Committee on National Legislation as a victory for diplomacy over confrontation. The swap comes amid ongoing backchannel talks between the US and Iran, which have seen a softening of tensions, less stringent enforcement of oil sanctions, a reported decline in attacks on US troops in Syria and Iraq by Iranian-backed groups, and, as the UN confirmed this month, a deceleration of Iran’s uranium enrichment.

It is unclear whether further progress in negotiations is on the table. While Iranian president Ebrahim Raisi reiterated his willingness to return to the 2014 nuclear deal on the condition that the United States demonstrate its seriousness by easing sanctions. Also this month the UK, France, and Germany breached the terms of the deal for the first time by maintaining sanctions that were due to be lifted. The US also imposed new sanctions on multinational networks allegedly tied to drone production, on former president Mahmoud Ahmadinejad for allegedly supporting Iran’s intelligence agency, and — marking the anniversary of the death of Mahsa Amini — on officials from the Islamic Revolutionary Guard Corps and law enforcement and prison agencies accused of involvement in the crackdown against protesters over the past year. Also this month, the US Congress overwhelmingly passed legislation hardening sanctions against the Iranian leadership.

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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, which 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 these in addition to its own sanctions.

The United States, South Korea, and Japan announced new sanctions against several individuals and entities allegedly tied to North Korea’s weapons programs. North Korea fired two cruise missiles into the sea the following day, and again the next week as Kim Jong Un met with Russian president Vladimir Putin. The visit was Kim’s first trip out of the country since the start of the pandemic — part of a broader easing of pandemic restrictions. US officials responded to the meeting by threatening to “aggressively” enforce sanctions should North Korea provide weapons to Russia. The officials did not make clear what measures would concretely change, as both countries already face strictly enforced, far-reaching sanctions regimes. South Korea announced new sanctions during the visit, including against the North Korean minister of defense.

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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, with the barring of most financial transactions and of Russian oil and gas imports, and the freezing of Russian assets abroad, among other measures.

The European Union has begun negotiating its twelfth package of sanctions on Russia. Expected proposals include plans to use frozen Russian assets to aid Ukraine, and a ban on imports of Russian diamonds. The G7 is expected to announce its own version of the latter as well. This month, the United States imposed new sanctions against hundreds of Russian individuals and entities with alleged ties to energy production, mining, technology, finance, and more.

The Russian central bank increased its interest rate by 1 percent this month, following last month’s 3.5 percent hike. The changes may portend a slowdown for the Russian economy, but how this might translate to peace in Ukraine is unclear; Bloomberg reports that Russia’s defense spending will jump significantly, from 3.9 to 6 percent next year. Meanwhile, the New York Times reports: “Russia has managed to overcome sanctions and export controls imposed by the West to expand its missile production beyond prewar levels.” And the Financial Times reports that Russia has largely managed to shift its trade to avoid the G7 oil price cap.

Following a meeting with Turkish president Recep Tayyip Erdogan, Vladimir Putin reiterated his position that a return to the Black Sea Grain Initiative — which helped to provide millions of tons of desperately needed grains and other foods to the world market — is contingent on the US and EU holding up their end of the agreement and removing sanctions on Russia’s agricultural sector. The US and EU claim they have already done so, but the private sector appears to be “overcomplying” — a common dynamic of major sanctions regimes whereby private actors refuse to engage in permitted activity out of fear of violating — or because of the cost of navigating — the restrictions.

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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 were augmented during the George W. Bush administration, and 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.

Syria’s economic crisis continued apace this month. Following August’s fuel subsidy cuts — a response to the Syrian pound’s sanctions-driven free fall — protests have spread in Druze-predominant areas of the country’s south. As CBS reports, “Syria’s economy has been crippled by years of war and is straining under the weight of myriad international sanctions.” In a statement to the UN Human Rights Council, the chair of the UN’s Independent International Commission of Inquiry on the Syrian Arab Republic noted: “As the economic catastrophe in Syria deepens, States that are imposing unilateral coercive measures must review the impact of these on the lives of Syrian citizens and humanitarian actors. They must also maintain the steps taken to ease sanctions in response to the earthquake.”

Against this backdrop of deepening economic suffering, the US Congress may soon vote on the sanctions-tightening Assad Regime Anti-Normalization Act (HR 3202). The timing of the bill’s consideration remains unclear.

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Background: While the George W. Bush and Obama administrations adopted sanctions on arms purchases and against Venezuelan individuals, it was under Trump that broad financial sanctions and restrictions on oil exports were implemented, with dramatic effects on Venezuela’s economy. In addition, the United States, the United Kingdom, and some other governments have frozen Venezuelan state assets abroad, and have transferred others to Venezuelan opposition actors.

Three billion dollars in Venezuelan state assets that had been frozen under sanctions may soon be released to a UN-managed fund, to be used for health, education, and infrastructure. The conditions of the release were agreed nearly a year ago, but the funds had been held up by legal hurdles as creditors sought to claim the assets. The reported movement comes as the US and Venezuela continue talks for sanctions relief in exchange for certain commitments from the Maduro government regarding Venezuela’s upcoming presidential elections. While no further progress in the talks has been announced, Venezuelan bond prices have increased, reportedly in response to leaks signaling positive developments.

Venezuela and Trinidad and Tobago announced that they reached a deal on a joint natural gas project this month. The US had allowed the project in January, but on conditions that the Maduro government rejected as “colonial.” The details of the new arrangement are not yet public. Separately, Chevron, which received a license from the US Treasury to drill for oil last November, announced that it will expand oil production by 65,000 barrels per day (bpd) by the end of 2024. At an average of 785,000 bpd so far this year, this increase, while meaningful, would still leave the country far below the 1.9 million bpd that it was producing prior to the Trump administration’s sanctions.

At the UN General Assembly in New York, leaders of countries from around the world — Antigua and Barbuda, Chile, Honduras, Saint Lucia, South Africa, and more — called for the US to lift sanctions on Venezuela. So too did Colombian president Gustavo Petro in an interview with Democracy Now, where he condemned their profound humanitarian costs and their role in driving migration from Cuba and Venezuela that affects both Latin America and the United States. (Such clear opposition to US sanctions runs counter to claims by US officials that the Colombian government is completely in line with US policy toward Venezuela.) Senator Chris Murphy (D-CT) similarly pointed to “increasingly feckless US sanctions [which] contribute to the country’s economic misery” and thereby drive migration, as did Rep. Alexandria Ocasio-Cortez (D-NY), Rep. Chuy Garcia (D-IL), and Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-WA) in her response to the Biden administration’s decision to extend Temporary Protected Status for Venezuelan migrants. And a recent New York Times article included a rare acknowledgement of the role of sanctions in driving migration from Venezuela, citing CEPR’s Francisco Rodríguez.

And in a wide-ranging discussion on US-Latin American policy with The Intercept, Rep. Greg Casar (D-TX) noted: “Our sanctions in Venezuela have often been characterized as just targeting political elites in that country, but study after study have shown that our policies are contributing to starvation and death and economic instability for large numbers of ordinary people that have nothing to do with Maduro.”


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As noted above, the High-Level Week of the UN General Assembly in New York this month saw a flurry of condemnations of unilateral sanctions by heads of state and other senior officials, who decried the humanitarian consequences of these measures. Among the many leaders who did so, Brazilian president Lula da Silva noted: “Unilateral sanctions cause great harm to the population of affected countries. In addition to not achieving their alleged goals, they hinder the mediation and prevention processes, and the peaceful resolution of conflicts.” Honduras’ Xiomara Castro said, “It is important to end the practice of sanctions, piracy, and the confiscation of one nation’s assets against another; we cannot speak of a civilized world when we live exposed to being embargoed and having our reserves frozen in foreign banks.” South Africa’s Cyril Ramaphosa was one of several African leaders specifically calling for easing sanctions on Zimbabwe: “Sanctions against Zimbabwe should also be lifted as they are imposing untold suffering on ordinary Zimbabweans.”

Outside of the General Assembly, the UN Special Rapporteur on unilateral coercive measures and human rights highlighted how sanctions have “serious negative implications for the human rights of people living in sanctioned countries, including their right to adequate, appropriate and timely health care.” The human rights expert hosted a side event on the impact of sanctions on health-related Sustainable Development Goals, which featured CEPR Senior Research Fellow Francisco Rodríguez.

Prior to the UN meetings, a summit of the G77 — a grouping of 135 developing countries — resulted in a declaration that unequivocally condemned unilateral sanctions:

We reject the imposition of laws and regulations with extraterritorial impact and all other forms of coercive economic measures, including unilateral sanctions against developing countries, and reiterate the urgent need to eliminate them immediately. We emphasize that such actions not only undermine the principles enshrined in the Charter of the United Nations and international law, but also severely impede the advancement of science, technology and innovation and the full achievement of economic and social development, particularly in developing countries. Furthermore, we emphasize that unilateral coercive measures have negative and devastating impacts on the realization of human rights including the right to development and the right to food. Those measures also hinder the access of the affected countries to health-care, humanitarian assistance and equipment, and nationally owned assets.

While many members of the US Congress have pointed to the ways in which economic sanctions cause migration, this month, Rep. Vicente Gonzalez (D-TX) suggested sanctioning Mexico to pressure their government to do more to block migration to the U.S.

Finally, The New York Times reports that Niger is the latest site of sanctions-fueled humanitarian crisis, as “border closures and a freeze on financial transactions imposed after soldiers seized power are hurting millions.” Five members of Congress, led by Rep. Sara Jacobs, wrote a letter expressing concern about the humanitarian impacts of these sanctions, which are led primarily by the Economic Community of West African States (ECOWAS).

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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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