Sanctions, Keeping Things in Perspective

Including the state sponsors of terrorism, 13 countries are targeted with some form of country-based sanctions.   That is just 7% of all countries in the world.

An informative website I enjoy reading on a regular basis posted a comment about recent U.S. Government enforcement actions against companies that violate U.S. sanctions laws on Cuba.  It made a snide reference to the fact that recent enforcement actions related to just one entry, “not surprisingly, involved the “terrorist” island just to our south.”   

For some odd reasons, folks in this town have a tough time accepting the fact that Cuba is a state sponsor of terror. I guess they believe that terrorists and terrorist activities only come from the Middle East.   Countries such as Cuba and Venezuela may not seem as direct threats to the U.S., but they are sworn enemies of the U.S. Government and will work to undermine U.S. policy whenever it advances their agenda, whatever that agenda may be.   

The Congress this week approved the easing of U.S. sanctions on Cuba including allowing more family visits and liberalizing cash sales of medical and agricultural products to the state sponsor of terrorism just ninety miles away.  Despite what the sanctions-hater crowd may say, it is tinkering with current policy and not a major shift in the U.S. approach to dealing with the Cuban Communist Party.

According to the Department of State, there are 194 independent nation-states in the world.  Of this 194, four countries or 2.06% are listed as state sponsors of terrorism including Cuba, Iran, Sudan, and Syria.  For different reasons, the U.S. maintains economic sanctions on all four of theses countries. 

The sanctions on state sponsors of terrorism are not the only country-based or regional sanctions programs.  Including the state sponsors of terrorism, 13 countries are targeted with some form of country-based sanctions.   That is just 7% of all countries in the world.  And, it is not as if the restrictions are as intense as Cuba or Iran for all cases.  They are not. 

In addition to country-based economic sanctions, the Treasury Department administers various list-based programs.  Terrorists or suspected terrorists, foreign terrorists organizations, illegal arms traders or nuclear weapons and technology proliferators, and diamond smugglers are some of the individuals targeted by these programs.  Then you have export controls, but that is a separate subject for another day.

The crown jewels of U.S. sanctions programs are Cuba and Iran (barely 1% of the world’s total nation-states).  The unrelenting lobby to ease sanctions on Cuba and Iran is a cottage industry in this town that generates millions of dollars in lobbying fees by interested parties that seek unrestricted trade with Cuba and Iran, think tank conference expenses, and other non-profit organization activities aimed at lifting sanctions on Cuba and Iran.

For eight years the Bush Administration did the best it could to increase enforcement actions for violations of Iran and Cuba sanctions.  It had many notable sucesses, but even its efforts were hampered by conflicting priorities in the policy establishment and pressures from the farm lobby near-obssessive efforts to sell to Cuba and Iran.

The Congress and the embargo-lifters complain that the U.S. Government should spend less time chasing Middle Eastern terrorists than enforcing the Cuba embargo.  It is a red herring.  Who says our Government cannot do both? 

And what makes a Middle East terrorist less dangerous than a Cuban or Venezuelan terrorist?  A terrorist is a terrorist, no?  Non-state actors sucessfully attacked the U.S. on 09.11.01.  Why should a state sponsor of terrorism in the Americas be given less priority?

Just 2% of the countries of the world are currently deemed state sponsors of terrorism by the U.S.  Of these four countries, just two, Iran and Cuba, have the more severe limits restricting American trade and commerce with these countries. 

Efforts to minimize Cuba’s asymmetrical threat to the United States are politicaly myopic (the same holds for Venezuela).  Sanctions are a key tool for dealing with bad actors and in a post-09.11.01 world we have seen a spike, and more acceptance, of sanctions as a reasonable tool to exact pressure in many areas of the global economy.    Expect more, not less use of them in the years ahead.

Finally, taxpayers, corporate shareholders, and mutual fund owners should not be forced to underwrite bad investments in terror-sponsoring nations when a company does business in these places.  U.S. policy toward Iran, Cuba, Sudan, and Syria (and a few others that should be on the terror sponsors list) took time to develop and has evolved with the times.  A company or government that decides to zealously pursue investments in these places should take note of this. 

As sure as the sunrise and sunset,  these regimes will fail and new leaders devoted to freedom will take the reigns.   At that time, supporters of the old regime may be shown the door.

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