Session 3 - EARLY, Bryan - AWS
Convergence and Divergence in Implementing Economic Sanctions and Strategic Trade Controls CSIS PacForum Workshop on Strategic Trade Controls in the Asia-‐Pacific Taipei, Taiwan, December 5-‐6, 207 Presentation by Professor Bryan R. Early Center for Policy Research, University at Albany Contact at: [email protected]
Sanctions and STCs • Economic sanctions are policies designed to compel changes in a target actor’s behavior by adversely affecting its economic welfare • Strategic trade controls are policies that empower governments to regulate the trade and transfer of goods and technologies with strategic applications for security reasons
Differences between Sanctions and STCs • Goals and Time Horizons
– Sanctions are designed to be temporary and have fixed, achievable goals, while STC systems are permanent policy fixtures
• Targets – Economic sanctions are designed to have specific targets – STCs should be designed so that they can apply to all countries / foreign actors
• Scope – Sanctions can affect all economic transactions with a target, while STCs’ scope is far more limited (i.e., strategic items and technologies) – Sanctions are prohibition regimes, while STCs are licensing regimes
• Legislative basis
– STCs and sanctions often have different legal foundations within countries
Similarities between Sanctions and STCs • Targets
– Both can be used to restrict transactions with individuals, groups, and entire countries
• Implementation and Enforcement
– Often sanctions and STCs are implemented by the same governmental bodies – Preventing violations poses many of the same challenges • Evasion Networks; Financing; Transportation; Brokers
• Industry Outreach
– The impact of both sanctions and STCs can be enhanced by effective industry outreach programs
The Convergence of Sanctions and STCs • Sanctions imposed for nonproliferation objectives against targets that are actively seeking to proliferate can have their scope and implementation converge with STCs • STCs and sanctions can both act as prohibition regimes focusing on strategic goods and technologies and their implementation challenges strongly overlap – Scope of economic sanctions can still be much broader
• Examples, include North Korea, Iran, and Iraq
Case Example: North Korea • Strategic Trade Controls:
– UNSCR 1540 requires all states to impose STCs with the primary intent of preventing of WMD terrorism. – If states adopt STCs and implement them according to international norms, they should also apply to state-‐run efforts to acquire WMD.
• Economic Sanctions:
– The UN Security Council has adopted an increasingly stringent set of economic sanctions against North Korea focusing on its nuclear and missile programs (2016-‐ Present). – Previously, other countries imposed bilateral sanctions against North Korea as well (such as, the United States).
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Commerce Covered Only by UN Sanctions Commerce covered by STCs and UN Sanctions
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Commerce Covered Only by UN Sanctions Commerce covered by STCS and UN Sanctions
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Recent UNSC sanctions expand far beyond trade in strategic goods
Commerce Covered Only by UN Sanctions Commerce covered by STCS and UN Sanctions
Implications for Implementation • The obligations of implementing UN sanctions against North Korea are now much larger than those involved in implementing STCs against it • Implementing the UN sanctions requires a greater amount of resources, will involve more agencies, and covers a much larger scope of commercial transactions – Significant pressure on Customs agencies and financial regulatory bodies
• Industry outreach is the most cost effective way to enhance domestic compliance and prevent diversions – but must reach beyond traditional target communities for STC outreach
Sanctions and STCs • Economic sanctions are policies designed to compel changes in a target actor’s behavior by adversely affecting its economic welfare • Strategic trade controls are policies that empower governments to regulate the trade and transfer of goods and technologies with strategic applications for security reasons
Differences between Sanctions and STCs • Goals and Time Horizons
– Sanctions are designed to be temporary and have fixed, achievable goals, while STC systems are permanent policy fixtures
• Targets – Economic sanctions are designed to have specific targets – STCs should be designed so that they can apply to all countries / foreign actors
• Scope – Sanctions can affect all economic transactions with a target, while STCs’ scope is far more limited (i.e., strategic items and technologies) – Sanctions are prohibition regimes, while STCs are licensing regimes
• Legislative basis
– STCs and sanctions often have different legal foundations within countries
Similarities between Sanctions and STCs • Targets
– Both can be used to restrict transactions with individuals, groups, and entire countries
• Implementation and Enforcement
– Often sanctions and STCs are implemented by the same governmental bodies – Preventing violations poses many of the same challenges • Evasion Networks; Financing; Transportation; Brokers
• Industry Outreach
– The impact of both sanctions and STCs can be enhanced by effective industry outreach programs
The Convergence of Sanctions and STCs • Sanctions imposed for nonproliferation objectives against targets that are actively seeking to proliferate can have their scope and implementation converge with STCs • STCs and sanctions can both act as prohibition regimes focusing on strategic goods and technologies and their implementation challenges strongly overlap – Scope of economic sanctions can still be much broader
• Examples, include North Korea, Iran, and Iraq
Case Example: North Korea • Strategic Trade Controls:
– UNSCR 1540 requires all states to impose STCs with the primary intent of preventing of WMD terrorism. – If states adopt STCs and implement them according to international norms, they should also apply to state-‐run efforts to acquire WMD.
• Economic Sanctions:
– The UN Security Council has adopted an increasingly stringent set of economic sanctions against North Korea focusing on its nuclear and missile programs (2016-‐ Present). – Previously, other countries imposed bilateral sanctions against North Korea as well (such as, the United States).
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Commerce Covered Only by UN Sanctions Commerce covered by STCs and UN Sanctions
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Commerce Covered Only by UN Sanctions Commerce covered by STCS and UN Sanctions
Evolution of the UN Sanctions and STCs Imposed against North Korea All Potential Transnational Commerce with North Korea
Recent UNSC sanctions expand far beyond trade in strategic goods
Commerce Covered Only by UN Sanctions Commerce covered by STCS and UN Sanctions
Implications for Implementation • The obligations of implementing UN sanctions against North Korea are now much larger than those involved in implementing STCs against it • Implementing the UN sanctions requires a greater amount of resources, will involve more agencies, and covers a much larger scope of commercial transactions – Significant pressure on Customs agencies and financial regulatory bodies
• Industry outreach is the most cost effective way to enhance domestic compliance and prevent diversions – but must reach beyond traditional target communities for STC outreach
