[governance] Economic, Energy, Agricultural and Trade Issues: Smart Sanctions: Confronting Security Threats with Economic Statecraft

[Louis Pouzin (well)]

The USG, very much like a sorcerer apprentice, is escalating threats around
the world.
As history has taught many times the end result is quite predictable.
Louis
- - -

On Sun, Aug 26, 2012 at 3:41 PM, parminder <parminder at itforchange.net>wrote:

>
> Sanctions against other countries as a coercive measure was bad enough,
> but still country to country sanction have been around for long, and can be
> understood. What is called as 'smart sanctions' below is a very problematic
> category - whereby US state is able to exercise coercive power on specific
> individuals and groups within another country. Till now use of coercive
> power within the territory of a state was a (defining) sovereign right of
> the concerned national governments. This new development potentially
> re-writes the political scape of our world.
>
> Expectedly, Internet as a cross-border artefact of communication and
> control, with US's hegemonic position vis a vis the global Internet, is a
> key instrument of such selective 'smart sanctions', which is and will be
> the new basis of extra-territorial political control by the US. (BTW, the
> most unacceptable 'drone attack's by the US inside Pakistan's territory is
> another case of such targeted 'smart sanctions' as against conventional
> country to country wars.)
>
> It will be interesting to know the details of how the US based Internet
> behemoths like google, facebook, microsoft etc actually collaborate with
> the US state for such 'smart sanctions' which will form the basis of US's
> global control. The stuff we have been reading about the US state forming
> close operating relationships with these global Internet companies is lot
> about such 'smart sanctions'. And there is such a cloak of secrecy over
> these arrangements (for ex
>
>
> http://legaltimes.typepad.com/blt/2012/03/doj-asks-court-to-keep-secret-any-partnership-between-google-nsa.html <http://legaltimes.typepad.com/blt/2012/03/doj-asks-court-to-keep-secret-any-partnership-between-google-nsa.html>
>
> There are very dangerous forerunners to a new US hegemonic global regime
> with selective co-optation of groups and classes from different countries.
> Manuel Castell's famous network theory gives a very good analysis of the
> proclivities of the network for such centralised control with selective
> co-optation. It is chillingly alarming how true to the theory is the
> phenomenon playing out.
>
> For those who wonder why the ICANN model under US control which largely
> deals with not very consequential issues (and I agree to this more than
> most people here) is such a red rag to so many of us. It is so becuase the
> US control over the ICANN model, and its support among so many despite its
> patently undemocratic nature, represents the new paradigm of use of
> Internet for some very serious and unprecedented hegemonic control over the
> world by the US and its allied groups.
>
> parminder
>
> On Friday 24 August 2012 11:17 AM, Salanieta T. Tamanikaiwaimaro wrote:
>
> Dear All,
>
>  It was not all that long ago when we were alerted to the trials and
> difficulties that colleagues in Syria and Iran were going through. The
> creation of elite armies to hunt down dissidents and the restrictive supply
> of bandwidth to cause a lack of access have been challenging for civil
> society activists and civilians.
>
>  Kind Regards,
>
>       Smart Sanctions: Confronting Security Threats with Economic
> Statecraft <http://www.state.gov/e/eb/rls/rm/2012/196875.htm>
> 08/23/2012 03:04 PM EDT
>
>  Smart Sanctions: Confronting Security Threats with Economic Statecraft
>
> Remarks
> Jose W. Fernandez
> Assistant Secretary, Bureau of Economic and Business Affairs
>  San Francisco, CA
>  July 25, 2012
>
> ------------------------------
>
>  *Introduction*
>
> Good evening. Thank you for the introduction. I’m delighted to be in San
> Francisco and at the World Affairs Council.
>
> I am here to talk about sanctions. Now, I didn’t come into the State
> Department to get involved in sanctions. I came to support development,
> promoting American values, and helping U.S. business to compete abroad and
> create jobs here. But if Clausewitz wrote that “war is diplomacy carried
> out by other means,” my time at that State Department has taught me that
> sanctions too are a form of diplomacy. And this is nothing new.
>
> Throughout world history, effective diplomacy and statecraft more often
> than not, required a nation to use its commercial and economic leverage to
> achieve political and strategic goals. Within this narrow focus, the use of
> sanctions to exploit that leverage is virtually as old as diplomacy itself.
> Indeed one of the earliest recorded uses of economic sanctions was by
> ancient Athens. Pericles ordered all trade between Athens and Megra banned
> in retaliation for Megra’s support of Sparta. In more recent decades,
> sanctions were used against a number of countries, such as South Africa for
> apartheid and Serbia for its actions during the break-up of Yugoslavia. The
> fact of the matter is that, while there are many carrots that can be
> offered to countries – development assistance or increased access to
> markets – economic sanctions is one of the few sticks…short of war.
>
> For the United States, the sticks we use today have evolved from the
> historic policies of the 20th century that shut out Castro’s Cuba from
> the global economy, and halted Iranian Oil in 1979 after the takeover of
> the American Embassy in Tehran. These days, our approach is more
> calibrated. Instead of imposing only wholesale embargos on all of a
> nation’s trade, our deeper understanding of the many complex relationships,
> transactions and interactions that make up a nation’s economy enables us to
> craft sanctions regimes that can focus on certain sectors and actors, which
> more effectively achieve our goal while avoiding collateral damage. Those
> targeted measures are what we call “smart sanctions,” and that’s what I
> would like to talk about: how smart sanctions can be an effective foreign
> policy tool, and how smart implementation of sanctions promotes American
> economic prosperity and national security.
>
> We start with the reality that there are many foreign policy priorities
> that will compete with sanctions: negotiating new trade agreements with
> Korea and Colombia, managing relationships with strategic allies such as
> Pakistan and Russia, and supporting the transitions in North Africa. So
> where do sanctions fit within our priorities?
>
> *Smart Sanctions*
>
> When we discuss smart sanctions, the first question is: “What is our
> goal?” What are we trying to achieve? Sanctions are generally invoked for
> one of three purposes: 1) to change a government’s or private actor’s
> unacceptable behavior; 2) to constrain such behavior going forward; and/or
> 3) to expose behavior through censure. The goal is to raise the economic
> cost of unacceptable behavior and denying the resources that make it
> possible.
>
> Given these goals, what are our available tools? Well, as we ratchet up
> pressure, sanctions increase and change. At the most basic level, we
> withhold U.S. government cooperation, such as by prohibiting development
> assistance. But, this only gets us so far, because most of the bad actors
> in this world don’t get a lot of assistance. As we move to a higher level,
> we look to freeze the assets of individuals and governments and restrict
> their access to the U.S. market or prevent them from receiving visas.
> Finally, we might also ban exports or imports from countries for certain
> activities, as in the case of Iran for refusing to address the
> international community’s concerns about its nuclear program.
>
> An even more aggressive approach involves the use of “secondary
> sanctions.” These measures act against companies in third countries who do
> business with a U.S.-sanctioned target, thereby indirectly supporting the
> behavior of the bad actor. Ultimately, making that institution choose
> between doing business with a rogue country or operating in the United
> States.
>
> But at the same time that we consider the optimum sanctions for a given
> objective, an important element for consideration is how to ensure that
> sanctions are structured to achieve the desired outcome, while minimizing
> collateral damage to U.S. and other interests.
>
> This unwanted collateral damage includes investments, economic and trade
> relations that we want to maintain, and protecting innocent citizens in the
> targeted country. For example, in Iran, the door is still open for the sale
> of agriculture products and medicine. Approval was given for NGOs working
> to empower Iranian women, support heart surgery for children, for
> consultants on a telecom fiber optic ring, for a lawyer’s association
> providing legal training, and for a media company that filmed an Iranian
> election. So our smart sanctions are targeted.
>
> Effective diplomatic leadership is also crucial to effective sanctions.
> Sanctions are more likely to have an impact when many countries
> participate. The more global leaders are on board in imposing sanctions,
> the more powerful the message that certain behavior is unacceptable in
> today’s world.
>
> So, let’s look at a few recent cases – Iran, Syria, Burma, and Libya – and
> review our sanctions policy.
>
> *1) **Iran*
>
> Iran’s destabilizing actions speak for themselves: refusal to address
> international concerns about its nuclear program; defiance of UN Security
> Council resolutions; support for terrorism, and efforts to stir regional
> unrest, all present a grave threat to international peace and security.
> Iran remains one of our top foreign policy and international security
> priorities.
>
> Smart sanctions have played a prominent role in the success of the
> Administration’s dual-track policy of pressure and engagement to compel
> Tehran to address the concerns of the international community over its
> nuclear program. In fact, senior Iranian officials, including President
> Ahmadinejad have acknowledged the negative impact of sanctions. The
> macroeconomic indicators tell the story: the Iranian rial has lost nearly
> half of its value in nine months, oil exports and revenues are down
> significantly, and inflation is rampant throughout the economy.
>
> The Administration’s recent actions on sanctions include:
>
>    - An Executive Order targeting development of Iran’s upstream oil and
>    gas industry and petrochemical sector. This order expands existing
>    sanctions by authorizing asset freezes on persons who knowingly support
>    Iran’s ability to develop its petroleum and petrochemical sector, which is
>    one of Iran’s primary sources of funding for public projects like uranium
>    enrichment.
>    - President Obama also enacted legislation targeting the Central Bank
>    and Iran’s oil revenues. Section 1245 of the 2012 National Defense
>    Authorization Act (NDAA) places sanctions on foreign financial institutions
>    for significant transactions related to the Central Bank of Iran (CBI) and
>    designated Iranian financial institutions. As a measure of the successful
>    implementation of the legislation, some 20 countries have qualified for
>    banking exceptions under the NDAA because they significantly reduced their
>    purchase of Iranian crude oil.
>
> In addition, the 27-member European Union implemented a full embargo on
> Iranian crude oil effective July 1.
>
> The possibility of sanctions has persuaded many firms to discontinue their
> business with Iran - Total, Shell, Statoil (Norway), Edison International
> (Italy), and many, many others. In fact, an Iranian official recently
> admitted that sanctions have led, according to their estimates, to a 20-30
> percent reduction in sales of Iranian crude oil. This translates into
> almost $8 billion in lost revenue every quarter.
>
> Our efforts aren’t limited to oil: as a result of U.S. and multilateral
> sanctions, major shipping lines have ceased servicing Iranian ports. The
> Islamic Republic of Iran Shipping Lines (IRISL), Iran’s major shipping
> line, and the National Iranian Tanker Company, Iran’s tanker fleet, have
> had increasing difficulty in receiving flagging, insurance, and other
> shipping services from reputable providers. This further decreases Iran’s
> ability to gain revenue.
>
> As we continue to seek progress on the negotiating front, we will maintain
> unrelenting pressure on Tehran. We know the pressure we are bringing to
> bear has been vital to getting Iran to the negotiating table. We all have a
> stake in resolving the international community’s concerns about Iran’s
> nuclear program through diplomacy if we can, and so we will continue our
> work with countries around the world to keep pressure on Tehran.
>
> *2) **Syria*
>
> Although Iran sanctions continue to produce results, Syria requires a
> different approach. Indeed, as the death toll rises above 17,000, the Syria
> crisis becomes graver every minute. There are food shortages. There is a
> lack of safe access to adequate medical services. Syrian families are
> fleeing the country and registering in refugee camps in neighboring
> countries. It is a rapidly deteriorating humanitarian crisis.
>
> Our goal in Syria is to support a democratic transition that reflects the
> legitimate aspirations of the Syrian people. The United States looks to its
> sanctions toolbox to isolate Asad and deprive him of financial resources
> that allow him to continue attacking the Syrian people.
>
> Even before the current outbreak of violence in February 2011, the United
> States had several sanctions programs against Syria as a result of Syrian
> support for terrorism. More recently, we applied U.S. sanctions through a
> series of Executive Orders, issued by President Obama, targeting
> individuals who use information technology to commit human rights abuses,
> senior officials of the Syrian government, and supporters of the regime
> such as some Syrian businessmen.
>
> The United States joined with likeminded countries in a multilateral group
> known as the “Friends of the Syrian People.” Through this group, we work
> with other countries to harmonize implementation of national sanctions
> regimes and coordinate efforts for implementing a multi-lateral sanctions
> regime. The work of this group is especially important given some countries
> have effectively blocked a UN Security Council resolution calling for
> international sanctions.
>
> In the group, we synchronize the individuals and entities targeted by the
> sanctions, and discuss ways to strengthen sanctions by identifying measures
> that will impact the Assad regime while permitting legitimate trade to
> continue to flow.
>
> So far, U.S. and international sanctions have had a significant effect on
> Assad’s reserves, and are making it difficult for the regime to finance its
> brutality.
>
> But what happens when sanctions are successful? How quickly do you unwind?
>
> *3) **Burma*
>
> Recent positive developments in Burma, that were unimaginable just last
> year, led the Administration to implement an innovative approach that eases
> certain sanctions and incentivizes further political and economic reform.
> Within the past year, over 500 political prisoners have been released, and
> the government and several armed ethnic groups (some of whom have been
> fighting against the government since 1948) have reached preliminary
> ceasefire agreements. Pro-democracy icon Aung San Suu Kyi re-registered her
> party and stood for office in recent parliamentary by-elections. She, along
> with 42 other candidates from her party, was elected to Parliament in early
> April.
>
> The Burmese parliament has also taken several steps towards reform,
> including passing new legislation to protect the freedom of assembly and
> the right of workers to form labor unions. The government is also taking
> steps to bring increased transparency to the national budget.
>
> Burma became subject to U.S. sanctions in the 1990s. Those sanctions were
> not universally emulated by many of our traditional allies. But, our
> sanctions are credited with helping to persuade Burma’s leadership to
> reconsider its long-term interests and move toward democratic reform. And
> now the country is becoming a case study in how difficult it is to be
> “smart” about easing sanctions. Our sanctions were initially developed
> before we gave serious consideration to the structure of sanctions and they
> were not built with an exit strategy in mind. That’s made it more difficult
> to address the developments of the last year, and it’s been a valuable
> lesson for crafting future sanctions regimes.
>
> With regard to Burma, even though many of our international partners moved
> to fully suspend their sanctions, we opted for a different route: We are
> easing our sanctions, but in a calibrated manner. Even after our most
> recent easing, we remain vigilant about the protection of human rights,
> corruption, and the role of the military in the Burmese economy. Our
> approach aims to support democratic reform while aiding in the development
> of an economic and business environment that provides benefits to all of
> Burma’s people.
>
> In forming our easing policy, we were also mindful of the desire for
> American companies to contribute to improved human rights, worker rights,
> environmental protection, and transparency in Burma, including the need to
> improve the transparency of the Myanma Oil and Gas Enterprise (MOGE),
> Burma’s state-owned oil company. We sought to do so while working for a
> broad easing across sectors. And we did something that hadn’t been done
> before in a license context: we integrated novel reporting requirements
> into the new investment license. These requirements, which will have a
> public transparency component, cover issues such as due diligence in
> protecting human rights and worker rights, and transparency in land
> acquisition and payments to the Burmese government, including state-owned
> enterprises. In addition, companies working with MOGE must report their
> investment within 60 days. The purpose of the public reporting is to
> promote greater transparency and encourage civil society to partner with
> our companies toward responsible investment. We want American companies to
> take advantage of the new opportunities. We think that by allowing them to
> invest in Burma provides an opportunity to share American values,
> transparency, and model corporate governance in the country.
>
> Another key element of this policy can be found in the general license.
> While permitting new investment and financial services, we do not authorize
> new investment with the Burmese Ministry of Defense, state or non-state
> armed groups (which includes the military), or entities owned by them. U.S.
> persons are also still prohibited from dealing with blocked persons,
> including listed Specially Designated Nationals (SDNs), as well as any
> entities 50 percent or more owned by an SDN. It’s also important to keep in
> mind that the core authorities underlying our sanctions remain in place.
> They weren’t terminated, just suspended. This means that back sliding by
> the Burmese government, or other potential spoilers, on democracy, human
> rights, etc., can be countered with the appropriate measures.
>
> We took the suspension route because while we are encouraged by the
> positive steps that President Thein Sein and his government have taken
> toward a more civilian led and democratic government, concerns still
> remain. These concerns include the continued detention of hundreds of
> political prisoners, ongoing conflict in ethnic areas, and Burma’s military
> relationship with North Korea. Going forward, we hope our calibrated
> approach results in increased democratic values and economic opportunities,
> and diminish human rights abuses. But, again, we have also maintained
> flexibility to further ease, or re-impose, restrictions as necessary. So
> stay tuned on Burma. We are.
>
> So, let’s look at one of our recent successes?
>
> *4) **Libya*
>
> After suffering from more than four decades of erratic and abusive rule by
> Muammar Qadhafi, the people of Libya rose up on early 2011. As the Libyan
> grassroots opposition grew in strength, Qadhafi recognized that his grip on
> power was threatened. He responded by unleashing the Libyan military on his
> own citizens.
>
> Working closely with our allies around the world, the United States moved
> rapidly to support the Libyan people. Our efforts included launching a
> major economic sanctions program specifically geared to target Qadhafi and
> his cronies. The program sought to deprive Qadhafi of the resources
> necessary to sustain his assault, to preserve Libya’s wealth for its
> people, and to signal to Qadhafi and his allies that they were isolated and
> their days were numbered. These efforts were on both domestic and
> multilateral fronts.
>
> Domestically, the U.S. government reached out to U.S. financial
> institutions to identify assets controlled by the Libyan government,
> Qadhafi, his family, and their cronies, in anticipation of a new sanctions
> program, and here we have a pleasant surprise: freezing Libyan assets had a
> far greater impact than first expected. For example, just one financial
> institution held assets of over $29 billion; another held almost $500
> million in a single portfolio. Freezing these assets substantially
> constrained Qadhafi’s campaign.
>
> But we do not act alone: just as the United States reacted with
> unprecedented speed, so too did the international community. The day after
> President Obama signed the Executive Order to freeze over $30 billion in
> Libyan assets, the UN Security Council imposed sanctions targeting the
> individuals most responsible for the violence. As the conflict intensified,
> the Security Council expanded its approach, imposing further sanctions on
> key financial and economic institutions, such as the Libyan Central Bank,
> the National Oil Corporation, and a number of Libyan sovereign wealth funds.
>
> Unilateral and multilateral sanctions, reinforced with intense diplomatic
> and military efforts, hastened the demise of the Qadhafi regime. Targeted
> sanctions appeared to motivate Libyan leaders to defect, like the Foreign
> Minister Moussa Koussa. Broad private sector support in implementing
> sanctions removed the resources Qadhafi needed to supply his military and
> pay his mercenaries, and safeguarded the wealth of the Libyan people from
> Qadhafi and his cronies. Ultimately, this allowed Libya’s people to
> courageously liberate themselves and begin a new, democratic era. Our goal
> then became to lead a rapid transition to ease sanctions and help Libya
> re-open for business.
>
> Last April, I traveled with representatives from twenty U. S. companies to
> Tripoli. We followed up on U.S. commitments to deepen economic and
> commercial relations with Libya in the aftermath of Qadhafi. While there, I
> was met with overwhelming goodwill for the U.S. and appreciation for U.S.
> leadership in the international operation to protect Libyan civilians
> against Qadhafi’s regime, and in following through with ensuring the new
> Libya was on a path to rebound.
>
> *Conclusion*
>
> Iran, Syria, Burma, and Libya remind us there is no one-size-fits-all
> sanctions strategy. Sanctions tools have to be flexible enough to adapt to
> rapidly changing conditions. From each application of sanctions, we learn a
> new lesson. What we learned from unwinding the Libya sanctions, we applied
> to Burma, and will help us as events unfold in Syria.
>
> We’ve seen success in Libya, changes in Burma, and acknowledgement of an
> impact in Iran. While the results may take months or years to be apparent,
> we know economic sanctions work. They can be a powerful tool in diplomacy –
> a stick whose use we are constantly evaluating and working to improve, and
> to keep smart.
>
> Thank you.
>
> *The Office of Website Management, Bureau of Public Affairs, manages this
> site as a portal for information from the U.S. State Department.
> External links to other Internet sites should not be construed as an
> endorsement of the views or privacy policies contained therein.*
>   ------------------------------
>
>
>
>  --
> Salanieta Tamanikaiwaimaro aka Sala
> P.O. Box 17862
> Suva
> Fiji
>
>  Twitter: @SalanietaT
> Skype:Salanieta.Tamanikaiwaimaro
> Fiji Cell: +679 998 2851
>
>
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