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American ShipperNewsRegulationRisk & ComplianceTrade Compliance

US government struggles to assess sanctions impact

The Government Accountability Office found that Treasury, State and Commerce agencies, which administer U.S. economic sanctions, lack the ability to definitively measure their effectiveness.

U.S. government agencies in charge of administering economic sanctions against other countries generally lack the ability to definitively assess their effectiveness in meeting foreign policy objectives, according to a congressional watchdog agency report

The Government Accountability Office (GAO) recently conducted its review on the federal government’s ability to assess the impacts of economic sanctions at the request of the House Oversight and Reform Committee’s Subcommittee on Government Operations. 

“Agency officials cited the difficulty — or, in some cases, the impossibility — of identifying sanctions as the sole or most significant cause of a target’s action relative to U.S. policy goals,” the GAO said. 

Other difficulties for these federal agencies to fully assess the effectiveness of U.S. economic sanctions include changing policy goals and objectives and the lack of “reliable” data.

The three primary administrators of U.S. economic sanctions include the Treasury, State and Commerce departments. Collectively, these departments administer about 20 country-based or country-related sanctions programs. 

Sanctions may target a country’s economy or specific sectors, such as defense-related industries, or foreign persons and companies. U.S. persons or companies generally are restricted from exporting certain U.S.-made goods and technologies to sanctioned countries. Sanctioned countries, entities or individuals also may be blocked from access to the U.S. financial system. 

GAO said Treasury, State and Commerce officials told them “they do not conduct their own assessments of the overall effectiveness of existing sanctions programs in achieving broad policy goals. Instead, they have directed resources toward assessments of sanctions’ impacts on targets, such as the impact on a target country’s economy or trade.” 

To conduct its investigation, GAO said it resorted to reviewing 17 outside academic studies that assessed impacts of economic sanctions. 

“We found strong evidence — based on studies examining factors that contributed to the effectiveness of sanctions in changing targeted countries’ behavior — that sanctions have been more effective when implemented through an international organization or when targeted countries had some existing dependency on or relationship with the United States,” the GAO investigators wrote. 

The Trump administration has relied heavily on the use of unilateral sanctions against countries that pose a threat to national security or foreign policy objectives. Sanctions have been increased against countries such as Iran, Cuba, North Korea, Syria, Russia, China and Venezuela during the past three years.

The GAO report, however, warned that sanctions may have “unintended consequences” for the targeted countries, including “negative impacts” on public health and human rights.

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Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.

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