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15 July 2021, Gateway House

Sanctions and counter-sanctions

For years, Western countries have used sanctions as a means of economic warfare against their adversaries. Now, China and Russia are utilising the same tactic against the West. The United Nations Security Council is paralysed by differences between the five permanent members, leaving the tools of unilateral sanctions and counter-sanctions to proliferate at the cost of UN-approved multilateral sanctions.

Fellow, International Security Studies Programme

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For decades, the U.S. and the European Union (EU) have imposed sanctions to coerce their adversaries, most prominently China and Russia, to change their foreign and domestic policies. In recent months, there’s been a stream of sanctions from the West on Russia for its frequent cyberattacks[1] and its treatment of the opposition leader, Alexei Navalny[2] and on China for its human rights violations against the Uighurs in Xinjiang.[3]

Now the reverse is happening too. On June 10, China passed a new domestic law to counter Western sanctions which mandates travel bans, asset freezes, and commercial restrictions against those individuals and entities involved in designing and implementing the U.S. and EU sanctions.[4] Earlier in March, China had sanctioned the EU and British parliamentarians, academics and think tanks alleging their complicity in spreading “lies and disinformation.”[5] Likewise, in April, Russia placed travel bans on EU officials and,[6] most recently, on Canadian officials in retaliation to their sanctions against Russia.[7]

The new sanctions and counter-sanctions regimes reflect a paradigm shift in post-Cold War international politics. In contrast to the previously preferred and accepted multilateral sanctions, legitimised through the United Nations (UN) Security Council, countries are now imposing their own unilateral or autonomous sanctions to fulfil their foreign policy objectives. A key feature of these is the secondary sanctions, which seek to penalise third parties which commercially engage with the sanctioned countries.

The U.S. tops the charts in thrusting sanctions on countries, imposing approximately 150 sanctions regimes between 1990 and 2015 – between the Bush Sr. and Obama administrations.[8] Under subsequent administrations, sanctions became even more pronounced, as seen in the application of the Countering America’s Adversaries Through Sanctions Act (CAATSA) on Russia, Iran, and North Korea in 2017.[9]

The centrality of the American dollar in the global financial system ensures broader compliance with these sanctions, even from those opposing them. As Ivan Timofeev of the Russian International Affairs Council observed at a recent seminar organised by Gateway House and the Konrad Adenauer Stiftung, Chinese companies have complied with the U.S. sanctions while doing business with Russia.[10] Russian companies too abide by American sanctions, notwithstanding the negative attitude of their government.

The U.S. is followed by the EU, which has imposed 75 sanctions regimes during the same time period.[11] It uses sanctions to tackle issues outside the UN framework, like upholding the territorial integrity of Ukraine in the case of Russia,[12] against Turkey’s drilling activities in the eastern Mediterranean Sea[13] and China’s human rights violations against the Uighurs.[14]

There are various types of sanctions – comprehensive sanctions, sectoral sanctions and targeted sanctions. Sanctions are defined as restrictive measures. Accordingly, countries classify non-tariff barriers, quarantines, selective purchases and state-led consumer boycotts, as sanctions. Experts are unclear whether these amount to sanctions in the strictest sense of the term. They are certainly part of wider economic statecraft that countries use against their adversaries.

And, of course, there is the debate regarding their efficacy. Experience of sanctions over the past few decades, reveals they are effective vis-à-vis smaller countries with limited abilities, as in the case of Libya in 2003, where UN and U.S. sanctions forced its government to dismantle the weapons of mass destruction programme.[15] But with larger countries like Russia and China, they merely delay or slow down economic development and, worse, rarely change behaviour. Western sanctions have not altered Russia’s foreign or domestic policies. They also have had a minimal economic impact– in fact,[16] not importing food and dairy from Europe has helped make Russia self-sufficient in agriculture produce, showing that targeted countries adapt and attain self-reliance in critical sectors of the economy.

In this free-for-all sanctions era, where does India stand?

India has been subjected to sanctions and restrictive measures after the nuclear tests in 1974 and 1998. They benefitted the country as it achieved self-reliance in space and nuclear technologies. Now, with India due to its purchase of the S-400 missile system from Russia and its involvement in the Chabahar port of Iran, it could be subjected to secondary sanctions by the U.S. under CAATSA. New Delhi has a selective exemption for Chabahar port and may get a similar waiver for the S-400 purchase, but already the U.S. sanctions have adversely affected New Delhi’s ties with Moscow and Teheran.

India does not favour unilateral sanctions, but it has explored its own set of restrictive measures. In the aftermath of the 2019 Pulwama attack and last year’s border stand-off and Galwan Valley clash with China, New Delhi banned Chinese apps,[17] restricted Chinese investment in Indian start-ups,[18] and withdrew Most Favoured Nation status from Pakistan.[19] These can be considered ‘soft sanctions.’ Will India too consider becoming a sanctioning nation, imposing full-fledged sanctions on China or Pakistan for their destabilising actions? Probably not.

Sanctions serve as a middle path between diplomatic measures and military action. Multilateral sanctions are valuable in tackling challenges to international security. But their unilateral use is hurting their efficacy as they impact the global governance processes and institutions. To engineer a shift to the UN multilateral sanctions process, India must advocate for reforms that restrict their impact on third parties, limit their duration of application and follow ethical principles.

Sameer Patil is Fellow, International Security Studies Programme, Gateway House.

This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

For interview requests with the author, or for permission to republish, please contact outreach@gatewayhouse.in.

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References:

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/15/fact-sheet-imposing-costs-for-harmful-foreign-activities-by-the-russian-government/

[2] https://www.consilium.europa.eu/en/press/press-releases/2021/03/02/global-human-rights-sanctions-regime-eu-sanctions-four-people-responsible-for-serious-human-rights-violations-in-russia/

[3] https://www.gov.uk/government/news/joint-statement-canada-uk-and-us-statement-on-xinjiang

[4] https://www.globaltimes.cn/page/202106/1225911.shtml

[5] https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1863106.shtml

[6] https://tass.com/politics/1285557

[7] https://tass.com/world/1300017

[8] https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information

[9] https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/countering-americas-adversaries-through-sanctions-act

[10] https://www.gatewayhouse.in/sanctions-and-counter-sanctions-2/

[11] https://sanctionsmap.eu/#/main

[12] https://www.consilium.europa.eu/en/policies/sanctions/ukraine-crisis/

[13] https://www.consilium.europa.eu/en/press/press-releases/2020/11/06/sanctions-regime-against-illegal-drilling-activities-in-the-eastern-mediterranean-extended-by-one-year/

[14] https://www.consilium.europa.eu/en/press/press-releases/2021/03/22/eu-imposes-further-sanctions-over-serious-violations-of-human-rights-around-the-world/

[15] https://www.armscontrol.org/factsheets/LibyaChronology

[16] https://russiancouncil.ru/en/analytics-and-comments/analytics/us-sanctions-against-russian-sovereign-debt-possible-alternatives/

[17] https://pib.gov.in/PressReleseDetailm.aspx?PRID=1635206

[18] https://pib.gov.in/PressReleasePage.aspx?PRID=1615711

[19] https://pib.gov.in/PressReleseDetail.aspx?PRID=1570898

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