DDI ANALYSIS OF ECONOMIC SANCTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08S01350R000200470001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 143
• Document Creation Date: December 22, 2016
• Document Release Date: March 15, 2012
• Sequence Number: 1
• Publication Date: October 29, 1982
• Content Type: MEMO

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MEMORANDUM FOR: Director of Soviet Analysis
FROM
Director of Global Issues
SUBJECT : DDI Analysis of Economic Sanctions
2 9 OCT 1982
1. Attached for your information is a copy of the analysis of the effectiveness
of economic sanctions, which was requested by Judge Clark and pulled together by OGI.
2. The bulk of the report is a set of case studies done by country analysts.
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3. The quality of this project is a reflection of the high degree of cooperation
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ECONOMIC SANCTIONS: AN HISTORICAL
AND CONCEPTUAL ANALYSIS
Information available as of 1 October 1982
was used in the preparation of this report.
This memorandum was prepared by
Economics Division, Office of Global Issues.
with contributions from the Offices of European Analysis,
African and Latin American Analysis, Near East and South Asian Analysis,
Soviet Analysis, East Asian Analysis, and Global Issues.
Comments may be addressed to
Chief, Economics Division,
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FOREWORD
This study is a broad historical and
conceptual examination of economic sanctions
as an instrument of foreign policy in a variety
of political settings. Using the full range of
information available to this Agency, we have
studied 13 cases of economic sanctions covering
a representative sample of sanctions sponsors,
targets and circumstances. Drawing on the
information in these case studies as well as on
open literature, we have examined each of the
elements affecting the formulation and
implementation of sanctions. The result is a
framework for understanding the potential and
limitations of sanctions as a foreign policy
instrument, which can be used to assess whether
to impose sanctions as a sponsor and how to
respond to sanctions as their target.
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TABLE OF CONTENTS
Foreword
Summary
Economic Sanctions Defined 1
II Sanction Objectives 1
Hidden Objectives 3
III Establishing and Implementing Sanctions 3
The Scope of Sanctions 4
Sanction Sponsors 5
IV The Impact of Sanctions 6
Alternate Sources of Supply 6
Ability of the Target to Adjust Internally 7
Enforcement 8
V Commitment 9
VI Unintended Results 10
VII Conclusions 11
Tables
Economic Sanctions Case Histories
Economic Sanctions in American Diplomatic History
Economic Sanctions Case History Summaries.
Appendices
Case Studies
Graphics
Effectiveness of Sanctions
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Summary
A detailed analysis of 13 applications of economic sanctions yields mixed results
regarding their effectiveness as instruments of foreign policy. In none of the cases did
the imposition of economic sanctions force a country to reverse the actions that
triggered the sanctions. There are two main reasons for this failure.
o Most economies have sufficient flexibility to mitigate the economic
impact of sanctions by circumventing them or by making internal
economic adjustments.
o Even when the sanctions have substantial economic impact, countries
have shown a strong and lasting commitment to maintaining their
present course of conduct. The imposition of sanctions, in many cases,
has stiffened their resolve.
The case studies reveal that miscalculation, misunderstanding, or failure to take all of
their complex elements into account have caused sanctions to fail, sometimes with
serious economic and political consequences for their sponsor.
We found, nonetheless, that sanctions can serve several useful purposes:
o They make the target country pay an economic price, sometimes a high
one, for its policies.
o They contribute to its international isolation.
o They may strengthen the hand of opposition groups within?or outside?
the sanctioned country.
o For the country imposing sanctions, they provide a policy alternative
short of military action, satisfy important political constituencies, and
buy time and room for diplomatic initiatives and other approaches to
the problem.
Whether or not sanctions can be considered effective depends on the objectives
against which their impact is measured. The unstated objectives often differ from those
that are stated publicly. In general, sanctions are likely to be more effective when
judged against objectives of economic punishment or public disapproval rather than
against the goal of changing the conduct of an offending country.
Our analysis confirms the complexity of using sanctions as an instrument of
foreign policy. Key findings in this regard include:
o There are distinct tradeoffs between unilateral and multilateral
sanctions. While a single country may have a strong commitment to
levying sanctions, it is less likely to control the range of goods needed
to have a significant economic impact on the target. While a group of
sponsors has the potential ability to economically punish the target
country, this power is rarely used because of disagreements on sanction
objectives and a wide range of commitments to the sanctions effort.
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o Sanctions often yield unanticipated political and economic results; in
some cases the sanctions have caused countries to shift alliances or
their economic and political orientations.
o Sanctions acquire political significance even when economic effects
are minimal. Easing the sanctions without some evidence of
concessions by the offending country may give an impression of
failure. In any event, it probably will be taken as a signal of a policy
shift.
The potential effectiveness of sanctions can be gauged by the close analysis of
several factors. Most important among these are:
o The volume and importance of goods that the sponsor country can
withhold from the offending nation.
o The impact of the sanctions on the target country's domestic politics
and international position.
o The ability of the sanctioned country to adjust economically to the loss
of commerce.
o The commitment of the target country to the policies that triggered
the sanctions.
o The degree of cooperation the sponsor country can get from other
nations; reaching agreement on objectives is often difficult and in such
cases the political cost of getting cooperation from allies can be high.
o The economic cost of the sanctions to the sponsor country.
o The ability of the sponsor country to maintain the sanctions over a long
enough time to have an impact on the offending nation.
We also found, however, that even the most careful planning process is unlikely to take
full account of all the political and economic dynamics associated with the use of
economic sanctions.
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ECONOMIC SANCTIONS: AN HISTORICAL
AND CONCEPTUAL ANALYSIS
Economic Sanctions Defined
Economic sanctions are non-military actions to deprive a country of something of
value. They include such measures as restrictions on financial and commercial relations,
communications, and transportation. Sanctions can be sponsored by a single country, an
informal grouping of countries, or a multilateral organization. They are normally
imposed for one or more of the following reasons:
o To express disapproval of a country's conduct.
o To punish a country for its conduct.
o To force a country to change its conduct.
A detailed examination of 13 economic sanctions cases (see Table 1) indicates that
economic sanctions can be effective instruments of foreign policy. However, they are
extremely complex to use. They require careful consideration of:
o Their announced and hidden objectives.
o The economic and political ability of the sponsor to withhold something
of value over time.
o The ability of a country to go without the restricted commodities.
o The commitment of the target country to the action that triggered
sanctions.
The case studies reveal that miscalculation, misunderstanding, or failure to take all of
these elements into account have caused sanctions to fail, sometimes with serious
adverse economic consequences for their sponsor.*
Sanction Objectives
In our judgment the effectiveness of an economic sanction must be assessed in
terms of the objectives of the sponsoring country. According to a review of the
* To judge the effectiveness of economic sanctions we developed a set of "best case"
criteria to use as a benchmark. See the Appendix labeled "Effectiveness" for a
comparison of the 13 case histories with "best case" conditions.
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TABLE 1
Economic Sanctions Case Histories
1935-36 League of Nations Sanctions on Italy
1948-Present Arab League Boycott of Israel
1960 USSR Sanctions on PRC
1961-62 OAS/US Sanctions on Dominican Republic
1962-Present US/OAS Sanctions on Cuba
1965-79 UK/UN Sanctions on Rhodesia
1971 French Sanctions on Algeria
1973-74 OAPEC Oil Embargo on the United States
1977-80 US Sanctions on Pakistan
1978-79 US Trade Embargo on Uganda
1980-81 US Sanctions on Iran
1980-81 US Sanctions on USSR (Afghanistan)
1982 EC Sanctions on Argentina
Our analysis of economic sanctions is based in large measure on these 13 case histories.
We believe that they provide a sufficient analytical base for assessing the effectiveness
of sanctions because they:
o Represent the principal categories of sanctions employed in recent
times.
o Represent sanctions applied by geographically, ideologically, and
economically diverse countries.
o Are well-documented.
o Raise issues that will probably affect future applications of sanctions.
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literature, economic sanctions historically have been viewed as efforts to change a
country's behavior. This was the stated objective in nine of the 13 case histories included
in this study. In many instances, however, sanctions have had less ambitious objectives.
For example, Arab League members have long recognized that the best they can hope for
by their boycott of Israeli goods and companies doing business with Israel is to inflict
economic punishment; the boycott will not force Israel to change any of its policies.
Similarly, according to senior Carter Administration officials, the United States
recognized that sanctions would not cause the Soviets to withdraw from Afghanistan;
they were meant to punish the Soviets for their conduct and to let Moscow know the
price for similar conduct in the future.
In some cases, the objective may be only to show disapproval of a country's
conduct. Our examination of European Community sanctions on Argentina during the
Falldands war indicates that they were primarily intended to symbolize disapproval of
Argentina's invasion and European Community solidarity with the United Kingdom.
Sanctions often combine the three objectives and change their relative emphasis
over time. For example, sanctions by the United States and the Organization of
American States on Cuba were initially meant to bring down the Castro government.
However, as time passed the focus shifted to punishing the Cuban government and the
Soviet Union by making them pay a heavy economic price for their alliance.
In our judgment, sanctions that either punish or symbolize disapproval have been
employed in recent years for two reasons:
o Countries recognize that economic sanctions are unlikely to cause
sufficient distress to change the conduct of the major powers, and even
small poor states are usually able to mitigate or withstand their
impact.
o Mass communications and diplomacy conducted in international forums
have placed a greater premium on adherence to universal norms of
conduct. Sanctions may symbolically note a country's compliance with
these norms and highlight the deviation of another.
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Hidden Objectives
Critics of the use of economic sanctions often conclude that a sanction failed
because it did not change the country's conduct or achieve some other stated objective.
In many cases, however, the true objectives may not have been publicly stated. For
example, the announced objective of the League of Nations sanctions against Italy was to
end the war in Ethiopia. But the case history shows that the unstated objective of
League members was to check Hitler's expansionist plans by demonstrating the
effectiveness of the League's collective security provisions. Again, according to the case
history, two unstated objectives of the sanctions on Rhodesia led by the United Kingdom
were to prevent use of force by other countries and to maintain the United Kingdom's
"image" in the Commonwealth and Third World.
We have concluded that unstated objectives present policymakers with both
advantages and problems. On the positive side unstated objectives allow:
o Flexibility in determining when sanctions can be removed because
politically significant elements of the society will not have a basis for
judging "success" or "failure."
o A private discussion with the offending country of the true objectives
of sanctions, permitting it to accede to the sponsor's demands without
publicly capitulating.
There are three principal disadvantages, however, to unstated objectives:
o A country urging a multilateral group to impose sanctions will have a
more difficult task if it maintains a private agenda.
o Unstated objectives cannot be kept secret in a multilateral context,
making a public confrontation with the target country unavoidable.
o In both unilateral and multilateral situations, sanctions with unstated
objectives may be more difficult to justify to the people of the
countries imposing them who bear their costs.
Establishing and Implementing Sanctions
We have identified four key elements that are likely to affect a policymaker's
decision to implement economic sanctions:
o The kinds of items to be withheld or markets to be boycotted.
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o The need and desire for multilateral sponsorship and the willingness of
other states to participate.
o The economic and political effects of sanctions on the offending
country.
o The degree of the target country's commitment to the action that
triggered the sanctions and the sponsor country's economic and
political commitment to the sanctions over time.
Which of these elements must be considered depends on the goal of the sanction. If the
objective is to demonstrate disapproval, only the first two are pertinent; punishment, in
addition to the first two elements, requires assessment of the economic impact, while an
attempt to change a country's behavior requires consideration of all four elements.
The Scope of the Sanctions
The scope of sanctions can vary from a select number of items to a total embargo
on all commerce with a country. Scope must be considered in qualitative as well as
quantitative terms; although sanctions may be applied to a limited number of items,
those few items may be of critical importance. An example of an ideal circumstance for
sanctions would be a sponsor country that controls all transport routes to and from a
country. Absent foreign trade, the country would be forced to rely solely on its own
resources. South Africa is one of the few countries in a position to impose this kind of
complete sanction on several states such as Lesotho.
The sanctions analyzed in our case histories range from very broad embargoes ?
Italy by the League of Nations, Cuba by the United States and the OAS, and Rhodesia by
the United Kingdom and United Nations ? to more selective applications. Eight of the
13 cases involved withholding a narrow range of items, such as oil in the Organization of
Arab Petroleum Exporting Countries (OAPEC) embargo on the United States. In two of
the cases ? Soviet sanctions on the People's Republic of China and US sanctions on
Pakistan ? the principal item of value withheld was aid.
In each of the cases we analyzed, the scope of the sanctions was theoretically
sufficient to cause some economic deprivation. Furthermore, we found the scope of the
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ECONOMIC SANCTIONS IN AMERICAN DIPLOMATIC HISTORY
Economic sanctions have served as a fundamental instrument in the conduct
of American foreign relations from colonial times to the present. Controversy
about their effectiveness has lasted as long.
The passage of the Stamp Act by the British Parliament in 1765 led to the
first imposition of economic sanctions by Americans. The Stamp Act required the
affixing of revenue stamps to newspapers, pamphlets, almanacs, legal documents,
playing cards, and dice. The American colonies reacted to this new tax by calling a
Stamp Act Congress which, although unofficial, resolved not to import any goods
which required payment of the tax. The Parliament repealed the Stamp Act in 1766
after petitions by London merchants who complained of injury to English trade
caused by the effective colonial embargo.
In 1767, still searching for revenue to pay for administration of the colonies,
the British imposed duties on tea, glass, painters colors, oil, lead, and paper. The
Americans refused to import taxed items and, in 1770, the British repealed the
taxes on all items except tea. In this case, sanctions were a partial success. Three
years later, residents of Boston imposed a private economic sanction by dumping
chests of taxed tea into the harbor.
For the first 50 years of American diplomacy, economic sanctions were
employed in retaliation for British seizures of American ships and impressment of
seamen as well as in efforts to protect US shipping from the belligerents in the
Napoleonic wars. However, these sanctions were not always as effective as the
pre-revolutionary embargoes on imports. For example, the Non-Intercourse Act of
1809 closed American ports to French and British ships and outlawed imports from
those warring nations. However, it was repealed quickly when the loss of customs
revenues hurt the US Treasury more than the intended targets.
Between the early 19th and the first quarter of the 20th centuries, economic
sanctions were employed less frequently than in the first decades of the Republic.
Secure from serious foreign threats to its existence, the United States turned
toward the tasks of continental expansion and internal development. From 1825 to
1935, economic sanctions were employed by both the Federal government and
Confederate forces during the Civil War and the United States used sanctions
against several Latin American nations. In the last 50 years, sanctions have
resumed their prominent place in American diplomacy as the United States first
tried to avoid entanglement in the Second World War and then assumed worldwide
leadership after the War's end. In the postwar years, because of the dangers
inherent in nuclear superpower confrontation, economic sanctions have, in some
cases, replaced military action as instruments of foreign policy.
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sanctions generally to be in proportion to the perceived seriousness of the "offense."
That is, the United States and the OAS considered Cuba's move toward Moscow to be a
very serious offense warranting full-scope sanctions. Algeria's nationalization of several
French oil companies brought a proportionately less serious response involving an
embargo on Algerian oil production and purchases of oil by French companies. The case
studies suggest that, except for sanctions on Cuba and Rhodesia, sanction sponsors did
not intend to inflict extreme economic damage on the offending countries. In those two
cases, full-scope sanctions were, in many ways, a prelude to military action.
Sanction Sponsors
Sanctions can be sponsored by a group of individuals within a country, a single
country, an informal group of countries, or a formal multilateral organization. Although
groups of individuals have sponsored sanctions (for example, US longshoremen's refusal to
handle goods destined for Iran during the hostage crisis), we did not analyze this category
because it does not involve official state conduct of foreign relations.
The principal advantage of a single-country sponsorship is that the country usually
has authority to enforce its sanctions. However, in the case of sanctions intended to
change conduct or to punish, a single country is less likely to be able to control enough
items of value to cause deprivation. If sanctions are a symbol of disapproval, concern
about actual impact is less and the disadvantage of a single country sponsor is reduced.
In the Uganda case, the trade embargo was a symbol of US disapproval of Idi Amin's
bloody rule even though its economic impact was insubstantial.
Multilateral organizations, informal or formal, have the potential advantage of
controlling more resources and eliminating more alternate suppliers and markets.
However, multilateral sanctions are replete with problems:
o Given widely divergent national economic and political interests,
reaching a consensus to impose sanctions may be difficult and their
provisions may be weakened in the process as in the case of the League
sanctions on Italy or the European community sanctions on Argentina.
o Lengthy discussions to achieve consensus give the target time to
adjust, such as Italy did during League debate in 1934 and 1935.
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o Alternatively, any country requesting multilateral participation in
sanctions it has already imposed risks a challenge to the sanctions'
legitimacy and divisiveness among potential sponsors, both of which
? work to the advantage of the target country.
o Even if consensus is reached on imposing sanctions, compliance is not
assured. The organization must, in the end, rely on enforcement by
members whose ability and willingness may vary greatly. UN sanctions
on Rhodesia were flagrantly violated by some members and not
enforced by others. Similar problems arose in the League of Nations
case, OAS sanctions on Cuba, and the Arab Boycott of Israel.
The best case for sanctions by a multilateral organization would be one in which a
relatively small group of countries with closely convergent interests impose sanctions on
a target country whose conduct impinged equally on their national interests. The OAPEC
oil embargo is an example of these circumstances. In theory, the European Community
and the Organization for Economic Cooperation and Development should be effective
sponsors of sanctions under proper conditions. In practice, even industrial countries with
shared values and many shared national interests have had difficulty imposing effective
sanctions.
The Impact of Sanctions
Sanctions can have economic and political effects on all parties involved as well
as on countries on the sidelines. The economic impact on the target country can range
from minor inconvenience to major economic dislocation and will be affected by:
o Its access to alternate sources of supply or markets.
o Its ability to adjust internally.
o The ability of the sponsor country to enforce the sanctions.
Review of the literature on the subject and the case studies reveals that each of these
factors has been important in determining the effectiveness of sanctions.
Alternate Sources of Supply
In 11 of the 13 cases we analyzed countries were eventually able to secure
alternate sources of supply or markets. The alternate sources came from ideological or
strategic foes of the sponsor in the cases of Italy, Cuba, and Rhodesia; and from
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opportunistic suppliers in the cases of Israel, the PRC, Algeria, the United States during
the OAPEC embargo, Uganda, Iran, and the USSR during the Afghanistan-related grain
embargo. During the short duration of the sanctions on the Dominican Republic,
alternate suppliers were able to circumvent some of the sanctions by purchasing arms,
vehicles, and petroleum from Canada, Western Europe, and the Middle East. The EC
sanctions on Argentina did not deprive Argentina of any commodities, but alternate
suppliers of most items were available if necessary.
Even though alternate sources of supply or markets are available, sanctions can
still have an economic impact. In several instances (the PRC, Cuba, and Rhodesia), there
was either a time lag between the imposition of sanctions and availability of alternate
supplies or a high economic or political cost involved in securing the supplies. The
availability of alternate supplies should not preclude successful application of sanctions.
However, governments imposing sanctions should recognize that the impact may be
diminished and that they may have to modify their objectives.
Ability of the Target to Adjust Internally
Countries subject to sanctions not only seek alternate supplies of items withheld,
but they try to adjust internally to the absence of those items. Adjustment can include
both increased self-sufficiency and a shift in demand away from the embargoed items.
Rhodesia and Cuba are both examples of countries that adjusted internally. Rhodesia
became much more self-reliant in manufactured goods during the sanctions. In fact, the
case study reveals that Rhodesia was so successful at internal adjustment (as well as
securing alternate sources) that the sanctions left Zimbabwe with a much stronger
economy than would otherwise have been likely. Moreover, white Rhodesians managed to
more or less maintain their standard of living during the long sanctions period. Cuba
shifted from an economy dominated by US capital and consumer goods to an economy in
which capital is supplied by Eastern Europe and Japan and the supply of consumer goods
is substantially reduced.
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Case Trigger
League of Italian invasion
Nations of Ethiopia
Sanctions
on Italy
The Arab
Boycott
of Israel
USSR
Sanctions
on the
People's
Republic of
China
Prospect of the
establishment of
a Jewish state in
Palestine.
Chinese
assertion of
independence
on ideological
and foreign
policy issues
Objective
Stated: To make
the war so costly
for Italy that a
diplomatic solution
to the dispute could
be found.
Unstated: Inhibit
Hitler's expansionist
plans by demonstrating
that the collective
security concept of the
League could work.
To hinder the economic
and military growth of
Israel. To serve as a
sign of opposition to
Israel and a useful
propaganda device.
To give China a
foretaste of even more
unpleasant consequences
that would ensue if
Beijing persisted in
challenging Soviet
leadership and Soviet
doctrine. To change
ideological and foreign
policy courses.
TEXT TABLE
Provisions
Cut all trade and
financial ties with
Italy. Did not
Include oil.
Primary: Bans all
trade between Arab
states and Israel.
Secondary: Bans
commerce with
companies that
contribute signifi-
cantly to Israel's
economic or military
strength. Tertiary:
Sponsors require third-
country firms to refuse
to use products or services
of blacklisted companies in
fulfilling a contract or
sale.
Impact
Few hardships felt by
Italian people. Unerrploy-
men t declined, fami 1 y
Income rose during
sanctions. Little if
any impact on the Italian
Government's ability to
maintain political leader-
ship or on Italy's
commitment to continue the
war.
Until 1975, little
discernible economic
Impact. After 1975,
some foreign firms may
have decided to forgo
trade with Israel.
Cancellation of
Soviet technical
assistance and with-
drawal of 2,000
experts.
Withdrawal of Soviet
experts dealt the Chinese
a heavy blow whose
effects were felt many
years afterwards.
Combined with three years
of bad harvests and the
mistakes of the Great Leap
Forward, sanctions helped
precipitate a domestic
crisis in 1960 through
1962.
Conclusions
Failure of these sanctions provides a
classic damnstrat ion of the problems
involved in establishing and implementing
multilateral sanctions. Membership did not
agree on objectives; sanctions late,
limited, and incomplete; League did not have
power to enforce sanctions; and Membership
did not control critical strategic goods.
Main achievement of boycott has been the
symbolic expression of Arab solidarity
against Israel The boycott sponsors do
not control the supply of goods Israel
Imports and do not effectively enforce
the sanctions.
Sanctions failed to change Chinese
ideological or foreign policies. In fact,
they led to adverse political consequences
for their sponsor. The Chinese leadership
was so committed to its ideological break
with the Soviets and to establishment of its
own independent foreign policy that it was
willing to bear the considerable economic and
political cost of the sanctions. Sanctions
provided the Chinese with a scapegoat to explain
economic failures. Chinese adjustment to
sanctions ultimately left Moscow with limited
economic means to influence Beijing's behavior.
The sanctions did punish the Chinese for their
conduct.
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Case Trigger
OAS/US Trujillo-
Sanctions supported attempt
on the to assassinate
Dominican Venezuelan
Republic President Romulo
' Betancourt.
US/OAS
Sanctions
on Cuba
UK/UN
Sanctions on
Rhodesia
The Castro
government's
domestic and
international
policies, parti-
cularly alliance
with the Soviet
Union.
Rhodesia's
declaration of
independence and
failure to agree
to permit majority
participation in
the government.
Objective
Stated: To punish the
Government of the
Dominican Republic for
assassination attempt.
Unstated: To force
political liberalization
or elimination of the
Trujillo regime.
Broad range of trade
sanctions and other
economic denial/
measures.
Stated: to end the
Smith rebellion and
restore legitimacy so
that ultimately the
country could be
granted independence
under majority rule.
Unstated: Wilson wished
to unseat Smith rather
than just induce a
return to negotiations.
Wilson also wanted to
head off any growth in
domestic pressures for
military intervention or
use of force by other
countries. To maintain
Britain's positive image
and reputation in the
international community.
Provisions
Suspension of trade
in arms and imple-
ments of war later
expanded to include
trade in petroleum
products, trucks,
spare parts, and
other items.
Initial: to
remove Castro from
power.
Subsequently: to
discredit the Cuban
economic model and
make Cuba and the
Soviet Union pay a
high price for
continued alliance
and for efforts to
export revolution.
Four sets of UK
and UN sanctions
banning a broad
range of trade and
other relations
with Rhodesia.
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Impact
Sanctions hit the
Dominican economy when
already sagging economic
performance hampered
adjustment. The Dominicans
were able to circumvent
some of the sanctions by
purchasing arms, vehicles
and petroleum. Economic
deterioration fostered
political unrest in the
middle and upper classes,
the army, and the Catholic
Church. After Trujillo's
assassination, the remaining
family and supporters lost
control of the government.
The sanctions significantly
damaged Cuba's growth and
general development. The
sanctions did little to
weaken Castro's internal
political position.
Economic impact affected
some sectors, notably
agriculture, more than
others but generally
Rhodesia's ability to
adjust internally
combined with circum-
vention of the sanctions
substantially reduced
economic effects.
Conclusions
The sanctions met with considerable success
in exacerbating deteriorating economic
conditions and providing fuel for the
floundering opposition. After Trujillo's
death, the continuation of sanctions forced
the Trujillo family and supporters to yield
control of the government.
The Castro regime was so committed to its
revolutionary policies that it was willing
to bear the considerable cost of sanctions.
Sanctions provided Castro with a scapegoat
for domestic problems, which he exploited to
gain acceptance of radical changes in Cuban
society. OAS participation did not change
results.
Failed to achieve principal objectives
because they were not fully enforced by
any of the major implementing parties;
key supplier, South Africa, flouted
sanctions; and the Rhodesian economy
adjusted quite well to the sanctions
that were enforced. Unintentionally.
the sanctions left Zimbabwe with a much
stronger economy than would have otherwise
been likely.
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Provisions
Suspension of lifting
of Algerian oil by
French companies.
Efforts to block
extension of IBRD
credits and delay of
US gas purchase.
French
Sanctions
on
Algeria
:Ihgg2L.
Dispute over
oil prices
and nationaliza-
tion of French
oil holdings in
Algeria.
OAPEC Oil 1973 Middle East
Embargoes War
the United
States
US Sanctions Under terms of
on Pakistan the Nuclear
Non-Proliferation
Act Pakistan's
refusal to accept
IAEA safeguards
on its existing
nuclear facilities
required total
ban on US nuclear
transfers. The
Foreign Assistance
Act prohibits pro-
vision of economic
and military
assistance if any
nonnuclear-weapons
state acquires
reprocessing tech-
nology or detonates
a nuclear weapon.
Objective
Force the Algerian
Government to
reconsider compensation
terms and the tax-
reference price of oil.
To serve as a symbol
of opposition to US
support for Israel. To
demonstrate solidarity
with Egypt and Syria.
To encourage the United
States to press Israel
to return occupied Arab
land.
To discourage the Paki-
stani military regime
from pursuing a nuclear
weapons program. To
slow development of the
program by persuading
other nuclear-weapons
states not to export
sensitive nuclear ma-
terial, equipment and
technology to Pakistan.
To demonstrate that the
United States would
withhold nuclear
cooperation and aid
from a nonnuclear state
that is attempting to
develop nuclear weapons.
Prohibit shipment
of oil to the United
States. Cut oil
production 5%.
Ban on US nuclear
transfers. Cutoff
of aid.
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Impact
Algerian production
dropped at least 25
percent in 1971, but
impact undermined by
developments in world oil
market where rising prices
enabled the Algerians
largely to offset the
losses from production
cutbacks.
The sanctions led to wide-
spread fuel shortages in
the United States and
other industrial countries
for a relatively short
time. The embargo awaken-
ed the United States to the
costs of importing sub-
stantial amounts of oil
leading to the beginning
of major adjustments in
US domestic and foreign
policies. The embargo
had a powerful demonstra-
tion effect on other
industrial countries that
were heavy consumers of
Arab oil; they began to
voice greater support for
Arab positions.
Sanctions did not halt
Pakistan's efforts to
develop nuclear weapons
capability. Economic
impact was minimal.
Conclusions
French companies settled the dispute on
terms favorable to Algeria. -Sanctions had
little impact on Algeria because France
failed to get cooperation of other states;
market conditions helped Algeria offset
revenue losses; French commitment was eroded
because it could not readily replace
Algerian oil.
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The United States remained committed to
its support of Israel. The Arab states
were not able to control the supply of
oil to the United States. The United ?
States was able to adjust to the embargo.
Yet, the embargo did demonstrate
opposition to US support of Israel and
symbolized solidarity with Syria and
Egypt.
Pakistan was willing to forgo US aid in
order to continue its efforts to develop
nuclear weapons because it perceived nuclear
weapons as an element vital to its national
security. Highly visible imposition of
sanctions increased domestic support for
the Government of Pakistan policies thus
easing the political cost of foregone aid.
The fact that the United States took tangible
action combined with demarches to other
countries has caused Islamabad to become
dependent on the clandestine procurement
network and has slowed development
of its nuclear program.
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Conclusions
US Trade
Embargo
on Uganda
Iftsga Objective Provisions
A lengthy series
of human rights
violations by
Idi Amin
US Sanctions Seizure of US
on Iran hostages
US Sanctions Soviet invasion
on USSR of Afghanistan
(Afghanis-
tan)
European Argentina's
Community invasion of
Sanctions on the Falklands
Argentina
Stated: To end human
rights violations in
Uganda.
Unstated: To put
enough pressure on the
Ugandan economy to under-
cut Amin's control and
thereby result in his
ouster.
To create sufficient
economic pressure on
Iran to force it to
release the hostages.
Stated: to bring about
a withdrawal of Soviet
troops from Afghanistan.
Unstated: punish the
Soviets for their
aggression.
Stated: To pressure
Argentina to comply
with UN Security Council
Resolution 52 demanding
Argentine withdrawal
from the Falklands and
resumption of negotia-
tions.
Unstated: To demon-
strate that the
Community would respond
to aggression against
one of its members.
Prohibition of trade
with Uganda
Initially to embargo
all US oil imports
from Iran; block all
Iranian assets under
US control; informal-
ly curtail some ex-
ports to Iran; parti-
cularly military
equipment. Later,
prohibition of all
exports to Iran
except food and
medicine.
Embargo of grain
sales; denial of
superphosphoric acid,
and fishing rights,
and tighter controls
on shipments of oil
and gas equipment,
metallurgical equip-
ment, communications
and automotive equip-
ment, and computers;
Olympic boycott
Prohibited imports
from Argentina for
a 30-day period.
Contracts that had
already been signed
and shipments under-
way were exempted.
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Impact
Despite its economic
problems and heavy
dependence on the US
market, Uganda suffered
little from US trade
sanctions.
Little impact on Iran's
ability to procure needed
imports but did change its
trading patterns. Iran
circumvented US and EC
sanctions on trade.
Blocking of financial
assets did not signifi-
cantly worsen economic
problems. Sanctions, by
themselves, failed to
force early release of
the hostages.
In 1980 USSR able to
replace only 9 million
of 17 million tons of
grain denied by the
United States, but the
impact declined the next
year as the USSR more
fully replaced denied
grain supplies. Some
delay in Moscow's effort
to upgrade domestic
fertilizer industry.
Retarded some moderniza-
tion programs. Deprived
Moscow of some prestige
and propaganda opportuni-
ties from the Olympics.
No significant economic
impact. Reduced chance for
a protracted war against
Britain.
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The United States was unable to gain cooper-
ation of other governments in shutting off
trade, and Uganda was able to find other
suppliers and buyers. Yet, sanctions
indirectly changed the Ugandan Government
because President Nyerere interpreted them
to mean that the international community
would not oppose his invasion of Uganda to
remove Amin by force.
Impact of sanctions was slight because the
Iranian economy was already operating far
below normal and Iran was able to circum-
vent sanctions. Although some allies gave
tacit approval to the asset freeze, the
United States failed to have full support of
allies and full control over embargoed items.
United States underestimated the strength of
the commitment of the revolutionary movement
In Iran and the willingness of Iranians to
sacrifice for their cause. The sanctions did
serve the US need to "do something" quickly in
response to the hostage seizure.
Illustrates the difficulty of implementing
economic denial measures on a multilateral
basis. United States and allies not able to
control supplies of grain because a major
exporter refused to participate. Intensity
of US commitment was affected by domestic
political considerations. No consensus among
major sponsors on how to carry out the
objectives. Sanctions did punish the Soviets
in some measure.
The EC sanctions against Argentina are the
classic case of diplomatic gesture.
Community demonstrated solidarity at little
cost.
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Enforcement
The ability to enforce sanctions is critical to their impact. Enforcement is, in
turn, affected by whether compliance is voluntary or mandatory and can be monitored
effectively. Compliance with sanctions imposed by a single country is usually mandatory
for persons in that country. However, even in this case, enforcement may be
complicated by the existence of corporate subsidiaries outside the jurisdiction of the
sponsoring country. Current problems of enforcing sanctions relating to the Soviet gas
pipeline are a clear example of this problem.
An added problem of enforcement is that persons affected by sanctions may
challenge them in courts or in legislatures. These challenges, even if not successful, may
delay implementation of the sanctions and provide the target with time to begin
adjusting. Delay may also introduce enough doubt about sanctions being sustained that
their impact is diminished.
Even if compliance with sanctions is mandatory, the ability to monitor compliance
depends on:
o The specific goods or services being withheld.
o The number and variety of alternate sources of supply. Not only is the
physical problem of monitoring more difficult, but the incentive to
break sanctions is greater when there are more suppliers willing to
violate sanctions in order to gain or to avoid losing a market.
o The geographic location of the target country. Multiple points of entry
to surrounding countries are difficult to monitor; transactions with a
nation surrounded by potential sanctions violators would be more
difficult to monitor than a country surrounded by sponsors.
o The target's ability to evade monitoring. Large industrial nations are
likely to have more effective, means of monitoring sanctions, but
countries have demonstrated considerable ingenuity in evading
sanctions.
o The legal authority and capacity of the sponsor country to monitor.
If any one of the possible weaknesses of enforcement and monitoring arises, the impact
of the sanctions will be reduced. Moreover, groups that are bearing the costs of imposing
sanctions will increase pressure to end them.
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The case histories are replete with enforcement and monitoring problems. The
League of Nations did not have the authority in the Covenant to insure that its own
members enforced sanctions against Italy. The United Nations, with authority to enforce
sanctions provided in Chapter 7 of the United Nations Charter, was no more successful in
enforcing its sanctions on Rhodesia. According to the case histories, even the United
States, with an intense interest, full enforcement authority, and a substantial monitoring
capability, was unable to prevent US firms from circumventing sanctions on Iran during
the hostage crisis.
Commitment
The success of sanctions in modifying behavior is affected by political as well as
economic impact. Political impact is difficult to quantify, but is affected by:
o The absolute severity of the economic impact of sanctions.
o The distribution of the economic impact among the population. To the
extent that the burden appears to be equally shared, the prospect of
maintaining political unity in the face of sanctions is improved.
o The ability of the government to maintain its leadership despite the
sanctions.
In general, the greater a government's commitment to the conduct that triggered
sanctions, the more likely it will be to bear their cost without modifying the conduct.
Moreover, its commitment is often solidified because it is being subjected to sanctions.
One author notes that the theory underlying the use of economic sanctions
"...disregards the simple .principle of adaptation: that which seems
unacceptable at, the beginning of. the conflict becomes acceptable as one
gets kised to life under hardship...value-deprivation creates the social
conditions wider which much more sacrifice is possible so that the limit for
political disintegration will be reached much later...."
The Chinese, Cuban, and Rhodesian cases are all examples of a high degree of
commitment.
o The Chinese continued their ideological and economic split with
Moscow despite the high initial cost of Soviet sanctions.
*Johan Galtung, "On the Effects of International Economic Sanctions, with Examples
from the Case of Rhodesia," World Politics, Vol. XIX, No. 3, April 1967, pp. 388-389.
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o The Cubans not only continued but intensified their initial conduct; as
the impact of sanctions diminished because of Soviet help, Cuba
became more irritating to the United States and other OAS members
by its efforts to export revolution and by acting as Soviet surrogates in
Africa.
o The Rhodesians remained committed to preserving minority rule and
minority economic advantages until civil war forced a change.
Countries imposing sanctions do not usually benefit from such a unity of purpose.
Their commitment is affected by:
o The importance the population attaches to the objective of the
sanctions and their willingness to bear the economic costs.
o The willingness of the government to incur the political costs of
sanctions.
o The willingness of allies to share the cost of multilateral sanctions.
In the likely event of problems with any one of these elements, commitment will be
reduced and the sanctions will probably not be sustained.
Review of the literature and case histories indicates that targets ? for the
reasons described above ? are far more likely to be committed to their course of
conduct than sponsors are to be committed to sanctions. This difference in commitment
combined with the fact that sanctions often do not have the impact intended provides a
concise reason for the failure of many economic sanctions.
Unintended Results
We found that economic sanctions can lead to unintended results. Given the
current degree of international economic interdependence, economic sanctions often
affect not only the countries directly involved but other nations as well. For example,
the sanctions on Rhodesia had an unintended negative impact on Zambia because of
disruptions in critical oil supplies and local trade and had an unintended positive impact
on South Africa which became a principal supplier and transshipper of goods bound for
Rhodesia. Moreover, political confrontation between sponsor and target can cause
dramatic, unforeseen, and unintended changes in the latter's foreign policy. The case
history of Soviet sanctions on the PRC provides a clear example of unintended political
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consequences. Soviet sanctions were intended to reassert Soviet foreign policy and
ideological leadership over the PRC. However, the result of the sanctions was to reduce
substantially Soviet participation in Chinese development and its attendant political
leverage. Furthermore, the sanctions were one of the reasons that the PRC turned to
the West for technology and capital. In the case of Cuba, US sanctions left Castro with
the choice of either yielding or reorienting the Cuban economy toward the Soviet Union;
he chose the latter.
Conclusions
Sanctions have achieved some of their objectives in several of the cases we
analyzed for this study. However, in none did sanctions, by themselves, change the
conduct of the target country. Of the three sanctions objectives, changing conduct is the
most difficult to achieve. Sanctions rarely have sufficient impact to induce change and,
even in the face of economic hardship, governments have been committed enough to the
course of conduct that triggered sanctions to bear the burden. Countries subjected to
sanctions, as well as to military action, have demonstrated a substantial ability to adjust
to deprivation. The ability to adjust must be taken into account when determining the
objectives of sanctions.
Sanctions are more likely to achieve objectives relating to punishment or symbolic
disapproval. In these cases response from the target country matters little and there is
less cost to the sponsor. However, these two objectives may be more difficult to sustain
because people in countries imposing sanctions may be less willing to bear even a small
cost in order to achieve a "symbolic" victory.
Whatever the objective of sanctions, the literature and case histories clearly
indicate the extraordinary complexity involved in their implementation. All components
of the sanctions must function effectively or their impact is seriously diminished. The
advantage lies with the target country, which has every incentive to attempt to avoid the
impact of sanctions through evasion or adjustment. Moreover, the existence of multiple
sources of supplies or markets controlled by countries or private individuals with political
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or economic reasons to break the sanctions provides many ways to avoid the economic
impact.
We believe that a thorough examination of key factors in the sanctions process
and a comparison with the objectives, can serve as a guide to the likely outcome of the
use of an economic sanction. This approach was validated by analyzing the 13 cases in
our study. Even the most careful planning, however, cannot take full account of the
political and economic dynamics associated with the use of sanctions because their
outcome frequently can be influenced by unforeseen events.
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?
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LEAGUE OF NATIONS SANCTIONS ON ITALY (1935-1936)
qackground to the Sanctions
Immediately following Italy's invasion in October of 1935, Ethiopia appealed to the
Council of the League under provisions of its Covenant, which declared any war or threat
of war a matter of concern to the whole League. The League Council Committee of Six
reported that Italy had resorted to war in violation of League obligations to submit
disputes to arbitration or judicial settlement. The adoption of this report by the Council
was the signal for the automatic application of sanctions under the provisions of Article
16.1 of the Covenant:
Should any Member of the League resort to war in disregard of
its covenants under Articles 12, 13, or 15, it shall im facto be
deemed to have committed an act of war against all other
members of the League, which hereby undertake immediately to
subject it to the severance of all trade or financial relations, the
prohibition of all intercourse between the nations of the
covenant-breaking State and the nationals of any other State,
whether a Member of the League or not.
Provisions of the Sanctions
The sanctions imposed by the League on Italy were not nearly as stringent as
Article 1R mandated. The League adopted four economic sanctions effective November
18, 1935:
o The prohibition of the export of arms, ammunition, and implements of
war.
o An embargo on certain agricultural and key mineral exports to Italy.
o The prohibition of loans, credits, and some other capital flows to public
and private entities in Italian territory.
o An embargo on imports of Italian goods.
In November, the League submitted to member governments an additional proposal that
extended the sanctions to petroleum, iron and steel (including alloy steels), and coal and
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coke. These later measures were never adopted; therefore, the scope of the sanctions
did not include commodities critical to Italy's war effort.
Not only was the scope of sanctions limited, but the League did not have the legal
power to enforce members' compliance with sanctions. Furthermore, at the time the
initial sanctions were imposed, the 54-nation League did not include Germany or the
United States, major suppliers of arms and oil to Italy.
Objectives of the Sanctions
The League of Nations sanctions against Italy are a good example of a case where
the stated and unstated objectives differed considerably. The announced objective of the
League's sanctions was "....to make the war so costly for Italy that a 'reasonable' solution
could be evolved. The (member) nations were prepared to be modest in their definition
of their 'reasonable' aims. Ethiopia, like Czechoslovakia at Munich, was expected to do
most of the yielding." *
The publicly stated objective for the League's action may not have been
paramount in this sanctions case. According to several academic studies, the League
intended the sanctions to inhibit Hitler's expansionist plans by demonstrating that the
collective security concept of the League could work in Europe where it had failed in
Manchuria. The Italian invasion of Ethiopia occurred against a background of rising
tensions in Europe created by a resurgent and expansionist Germany and Italy's search for
its place in the sun. The sanctions thus became
enforcement powers of the League of Nations.
Given the specific provisions of the sanctions,
a principal test of the peace
however, the prospects for
influencing the behavior of either Mussolini or Hitler were not favorable. The two
* Rita Falk Taubenfeld and Howard J. Taubenfeld, "The 'Economic Weapon': The
League and the United Nations," Proceedings of the American Society of International
Law at its Fifty-Eighth Annual Meeting held at Washington, D.C. April 23-25, 1964.
Washington, D.C., 1964, p. 184.
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principal powers in the League ? France and the United Kingdom ? did not intend the
sanctions to undermine seriously Italy's warmaking capacity. Although the Italian war
effort was vulnerable to a cutoff of strategic materials, the British and the French did
not want to impose stringent sanctions that would push Mussolini too far toward war with
them or toward alliance with Hitler.*
"Much of this was well known to Mussolini. Italian diplomacy made
excellent use of this desire to avoid war. At several critical times the
Rritish and French turned aside from imposing increasingly harsher terms
of sanctions in response to threats that Italy would assume belligerent
rites.**"
Compliance with the Sanctions
Not only was the scope of the sanctions limited, but compliance by members and
non-members was incomplete. Four members of the League refused to apply any
sanctions. The embargo on arms was not applied by seven members. Financial
restrictions were not adopted by eight countries. Finally, 13 countries failed to prohibit
imports from Italy. One author has noted,
"The belated and partial restrictions adopted did? not interfere at all
seriously with Italy's war-making potential or even with the comfort of her
population. Italy had been able to build significant stockpiles of many
essential products in the period from December, 1934, to September 1935,
while her intentions grew ever clearer. She was able to continue this
process for at least a month and a half after the invasion, since, for
coordination purposes, the effective date for many sanctions measures was
November 18. The failure to ban important items, such as petroleum, and
the failure to cut off shipments of banned items from non-members and
even from members permitted Italian industry to function at high levels."
Impact of the Sanctions
_
Analysts of the League's sanctions against Italy generally conclude that the
measures had little, if any, impact on the Italian Government's ability to maintain
* George W. Baer, "Sanctions and Security: The League of Nations and the Italian-
Ethiopian War, 1935-1936," International Organizations, Vol. 27, no.2., p. 166-170.
**
***
Baer, pp. 166-170.
Taubenfeld, p. 184.
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political leadership or on Italy's national unity and commitment to continue the war
against Ethiopia.
"With the measures of control over trade and over the economy which were
adopted or strengthened, few of the hardships envisioned by the advocates
of economic sanctions were in fact felt by the Italian people. Indeed, the
build-up and war periods saw a substantial decline in Italy's unemployment
problem. While wages rose little or not at all, many families saw over-all
income rise as more members went to work or received Army pay.*"
In fact, analysts believe that Mussolini was able to turn international opprobrium
into a tool for uniting the Italian people behind the Fascists in defiance of the
League.** Whether full application of sanctions over a long period of time would have
affected Mussolini became an academic question after Italy's conquest of Ethiopia and
the League's failure to extend sanctions to the point where concessions would have been
forthcoming.***
Results of the Sanctions
The League of Nations failed to achieve even its stated objectives against Italy.
Although collective action by the League was imposed for six months, the sanctions
failed to make the war so costly for Italy that it would be forced to resolve the conflict
by negotiation. More important, in the long run, failure to apply Article 16 fully, coupled
with serious problems of implementation of the sanctions due to French and British
concerns about alienating Mussolini, and to circumvention by members and non members,
provided a strong indication to Hitler that the League would not likely impose collective
security measures against expansion of the Third Reich.****
Taubenfeld p. 184.
Taubenf eld p. 185.
Taubenf eld p. 188.
**** Albert Speer reports, "Hitler concluded that both England and France were loath to
take any risks and anxious to avoid any danger. Actions of his which later seemed
reckless followed directly from such observations. The Western governments
had...proved themselves weak and indecisive." Speer, Inside the Third Reich, p.72.
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Historically, the focus of attention has been on the lack of will of the League
members to invoke the collective security concept of the League to check Mussolini and
to serve as a demonstration to Hitler. However, the fact is that even if Article 16 of the
Covenant had been fully invoked and even if all members of the League had complied
with the full sanctions, non-member Germany was willing to provide Mussolini with arms
required to continue the war and the non-member United States was willing to provide
the oil Furthermore, Ethiopia's inability to resist any army equipped with modern
weapons, including gas, severely limited the time available for even fully implemented
sanctions to have an impact on Italian military operations or to have a significant enough
impact on the Italian economy to give the political leadership pause in its prosecution of
the war.
Conclusion
Failure of the League's sanctions provides a classic demonstration of the problems
involved in establishing and implementing effective sanctions through a multilateral
organization.
o The membership of the League did not agree on objectives; sanctions
were late, limited, and incomplete.
o The League did not have the power to enforce sanctions; therefore,
League members violated them as their individual national interests
required.
o The membership of the League did not control the supply of value to he
withheld by the sanctions; therefore, Italy was able to purchase
essential strategic goods.
o Italy was able to adjust to the limited restrictions by stockpiling
commodities, invoking firm measures of economic control, and utilizing
idle resources.
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ARAB LEAGUE BOYCOTT OF ISRAEL (1948-Present)
Background to the Sanctions
The Arab boycott of the Jewish community in Palestine predates the formal
establishment of the state of Israel in 1948. In December 1945 the Arab League Council
called on all Arabs "to refuse to deal in, distribute, or consume Zionist products or
manufactured goods." Even before the boycott, many Arab individuals and groups
shunned Jewish businesses in Palestine.
Before 1950 the boycott attempted only to keep Israeli goods out of Arab
countries. In that year the boycott was extended to include third-party shipping in an
effort to slow trade into and out of Israel. The Arab League Council decided that any
ship carrying military equipment or immigrants to Israel would be barred from Arab
ports. In the early 19508 the Council also recommended extending the boycott to foreign
firms with branches in Israel.
The Arab boycott is administered by a Central Boycott Office (CBO)
headquartered in Syria and national boycott offices in each Arab country. The sponsoring
Arab League had seven members initially?Syria, Trans-Jordan, Iraq, Saudi Arabia,
Lebanon, Egypt, and Yemen?but has since grown to 21 active members. Each member
of the League appoints a representative to a central boycott committee which usually
meets semiannually. The committee recommends the addition or deletion of firms to the
blacklist, but its decisions are not binding. Each Arab country decides whether to accept
the decisions of the committee. Each country, therefore, maintains its own blacklist,
and the various country lists are not uniform.
Objectives of the Boycott
The boycott's stated goal is to hinder the economic and military growth of Israel.
Beyond that, however, the boycott serves as a sign of opposition to Israel and a useful
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propaganda device. In a recent press interview, CBO Secretary General Nurallah
Nurallah claimed that the boycott is "the only effective Arab measure against Israel."
One scholar has observed that "perhaps one of the principal benefits of the boycott
program, in Arab League eyes, is that it keeps the issue of Israel constantly before the
Arab people."
The Arab League does not distinguish among the various types of boycott it
administers, but the world business community generally differentiates among three
types of boycott action. The primary boycott bans all direct trade between Arab states
and Israel. Until the United States enacted strict antiboycott legislation in 1977, the
primary ban was most commonly enforced by a negative certificate of origin?a trade
document certifying that the goods in question are not made in Israel and do not contain
Israeli-made components. After the United States forbade US firms from supplying
negative certificates, most Arab states came to accept a positive certificate of origin
that indicates where the product and its components were manufactured and the name of
the manufacturer.
The secondary boycott, instituted in the early 1950s, bans commerce with
companies that contribute significantly to Israel's economic or military strength. A firm
is blacklisted if. it:
o Has a plant, branch, licensee, or regional agent for the Middle East in
IsraeL
o Is a partner in any Israeli company.
o Advises Israeli manufacturers.
o Acts as agent or principal importer for any Israeli firm.
o Prospects for natural resources in Israel.
Although boycott officials periodically insist publicly and privately that only firms adding
to Israel's strength are blacklisted, the contributions of many boycotted companies are
difficult to discern. The Topps Chewing Gum Company, for example, was blacklisted
after it licensed an Israeli factory to produce Bazooka bubble gum.
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Firms suspected of proscribed activity in Israel are usually confronted with a
questionnaire asking if they are engaged in forbidden practices. If a firm responds
positively or refuses to reply to a questionnaire, it may be blacklisted. US firms are
prohibited from responding to boycott questionnaires under the 1977 antiboycott
legislation. The law also requires US companies to report the receipt of questionnaires
to the US Department of Commerce. In late 1979 the deputy secretary general of the
C130 stated that since US antibovcott laws took effect, 90 percent of all US companies
blacklisted were boycotted for failing to respond to boycott office questionnaires.
In a form of extended secondary boycott, boycotting countries require third-
country firms to refuse to use products or services of blacklisted companies in fulfilling a
contract or sale to enforcing countries. A clause requiring such a refusal sometimes
appears as a contract condition. This requirement has been labeled a tertiary boycott in
the United States. It is especially prevalent in international banking. As Arab financial
institutions have come to play an increased role as lenders to corporate and government
borrowers, some borrowers have been pressured to refrain from dealing with blacklisted
banks or other institutions with alleged "Zionist" connections. Three Arab banks, for
example, recently withdrew as co-managers of a $2 billion loan for the Mexican state oil
company after blacklisted banks were included in the management syndicate.
Rnforcement of the Boycott
Numerous exceptions made by Arab states to the boycott principles detract from
their goal of preventing certain types of commerce with Israel. Some Arab League
members have criticized the central boycott bureaucracy itself. After the boycott-
committee went through all of 1.978 without meeting, the League commissioned an
investigation of charges by some members that the C130 is ineffective. A report written
by the Arab League's then-assistant secretary general accused the C130 of inflating its
performance.
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The threat of loss of business in the Arab world is the only tool the Arab League
has to enforce its secondary boycott. Therefore, companies that conduct a relatively
small share of their business with Arab countries are less vulnerable to boycott
pressure.
Even countries that strictly enforce the boycott have overlooked regulations and
dealt with blacklisted firms when they believed it was important to their economic
development or national security. Iraq, for example, bought buses from British Leyland
while the company was on the blacklist. If goods or services are only available through a
few exporters, exceptions are made. The boycott also may be ignored if a blacklisted
firm is the only source for necessary spare parts. The former head of the US Commerce
Department's Office of Anti-Boycott Compliance said in 1981, "If they want the goods,
Arab countries will accommodate themselves..., by and large an arrangement can be
made."
Military equipment is usually exempted from boycott requirements since
government-to-government sales are not subject to the boycott. Despite the principle of
blacklisting any company contributing to Israel's military strength, Arab governments
regularly put their own national security interests ahead of boycott rules. Still, the
"General Principles for the Boycott of Israel" recommend that importing countries
examine Israel's connections with arms manufacturers.
The boycott office excepts from boycott rules any international banking
institution from which the Arabs derive greater benefit than Israel regardless of the
extent of the bank's relationship with Israel. A commercial bank will not be blacklisted
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for dealing with Israel if boycott officials have evidence that the bank has loaned more
money to Arabs than to Israelis.
In the same vein, some Arab countries have told corporations investing in Israel
that they would not be blacklisted if they made an equal or greater investment in an
Arab country.
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Many large firms and banks, therefore, have found that they can deal
with both Arab states and Israel because the Arabs consider their products or capital
resources indispensable.
Implementation of the boycott varies from country to country. Iraq, Syria, Libya,
and Kuwait are considered by most observers to be among the strictest states. Morocco,
Tunisia, Sudan, Somalia, Mauritania, and Algeria do not enforce the secondary boycott.
Egypt ended its participation in the boycott as part of its peace treaty with Israel.
Iraq and Libya are among the most inflexible enforcers of the boycott, but they
will make exceptions for products or services that cannot be matched elsewhere,
especially items for the petroleum industry. Before the US embargo on Libyan
Petroleum-related services and equipment in 1981, Tripoli would allow boycott language
acceptable to US authorities in letters of credit for goods that could not be found outside
the United States.
Oman, at the other extreme, is an unenthusiastic participant in the boycott.
Muscat's practice has been to pay lip service to CBO directives and interpret them in a
liberal fashion or ignore them entirely.
Impact of the Boycott
Until the mid-1970s the Israeli Government for the most part was quiet about the
boycott, fearing that publicity would only remind the business community of its
existence. Israel's concern about the boycott before the increase in Arab economic
power in 1.973 was so slight that it abolished its small antibovcott office in 1971. In
1975, however, Israel reestablished an antibovcott unit. Still, Israeli Government
officials have differed in tone on the boycott, stressing its negative aspects when talking
to US officials but playing it down to potential investors. Israeli officials have
acknowledged that foreign firms are able to continue doing business with Israel through
various means such as dealing through separate companies or subsidiaries or simply
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ignoring the boycott. Although some firms may decide to forgo trade with Israel because
of boycott considerations, alternative sources of supply are usually available.
The imoact of the boycott on Israers economy is difficult to measure, but we
believe it was a factor in the drop in foreign investment in Israel from a high of $185
million in 1973 to $86 million last year after net disinvestment of $1 million in 1980.
Although Israel touts its free trade access to the EC as an attraction to investors, many
probably locate in EC countries to avoid boycott problems. The boycott, however, is only
one of the reasons for the decline in investment. Triple-digit inflation and a strong trade
union movement discourage many investors.
The economic impact on the sponsoring Arab states is diluted considerably by
their failure to implement the boycott stringently. If the Arab states adhered vigorously
to their boycott principles, they might deny themselves access to necessary inputs or
best suppliers.
In the long term, Arab countries' implementation of the boycott is likely to be
marked by continued self-interest, with exceptions to boycott regulations common when
they serve a particular nation's purpose. Therefore, its impact on Israel, the Arab states,
and third-country businesses will continue to be limited.
Conclusions
The Arab boycott of Israel has few of the elements necessary for successful
sanctions. Its main achievement has been the symbolic expression of Arab solidarity
against Israel.
o The Arab states do not control the supply of goods Israel imports.
o The boycott is not mandatory for members of the Arab League.
o The degree of enforcement varies widely, in part because of the
potential detrimental impact on the Arab states themselves. US
antiboycott legislation has complicated the enforcement effort.
o The political and economic impact of the boycott on Israel has been
small.
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USSR SANCTIONS ON PEOPLE'S REPUBLIC OF CHINA (1960)
Background to the Sanctions
The decision by the USSR in August 1960 to abruptly cancel its technical
assistance and withdraw its economic experts from China was a dramatic reminder that
Soviet aid entails a heavy political price. In the early 1950s, China had felt compelled to
pay this price of subservience to Soviet national interests and Soviet leadership of the
Communist world in order to enjoy the strategic and economic benefits of the Sino-
Soviet alliance. By the mid-1950s, however, as China began to stand on its own feet,
differences over a broad spectrum of political, military, economic, and ideological
questions began to undermine Sino-Soviet relations.
Faced with an increasingly independent China, Soviet policy vacillated. In
agreeing in 1957 to assist China in the development of an advanced weapons program, the
USSR sought to persuade the Chinese leadership to subordinate their political ambitions
in the interests of becoming a great military power. But when in 1958 the Maoist
leadership in quick succession claimed to have discovered a new road to economic
development (the Great Leap Forward) and a short cut to the ultimate Communist
society (the People's Commune) and then precipitated the Taiwan Straits crisis,
Khrushchev turned increasingly to threats and sanctions in order to secure compliance
from China. In June 1959, for example, both as a penalty for past behavior and a threat
for the future, Khrushchev formally abrogated the Soviet commitment to assist China in
the development of nuclear weapons.
With the publication of the polemical Lenin Anniversary pronouncements in April
1960, the Chinese issued an unmistakable challenge to Soviet ideological and political
leadership of the international Communist movement. The Soviets responded at a bloc
conference in June by circulating a long letter denouncing the Chinese and threatening to
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reduce aid unless China backed down. When Khrushchev then attacked Mao for being as
vain and isolated from reality as Stalin had been and the Chinese delegate responded in
kind, including a personal attack on Khrushchev for having "betrayed" Marxism-Leninism,
the moment of truth had arrived.
Objective of the sanctions
The purposes for which the USSR imposed economic sanctions against China in
mid-1960 were never clearly defined. Crude and self-defeating as it may seem in
retrospect, Soviet strategy appears to have been to give China a foretaste of the even
more unpleasant consequences that would ensue if Beijing persisted in challenging Soviet
leadership and Soviet doctrine. The Soviet Union may also have hoped to take advantage
of China's economic dislocation?the result of the Great Leap Forward and a succession
of bad harvests?to strengthen the hand of the moderate opposition within the Chinese
Communist Party to Mao's radical policies.
Having threatened in an international Communist forum to reduce aid unless
China retreated, the Soviets may have felt compelled to act when it became evident the
Chinese would not back down. Since the objective of the sanctions was not made clear,
it was interoreted by the Chinese as an attempt to force the replacement of Mao Zedong
as leader of the CCP or at least repudiation of his policies.
Description of the Sanctions
The USSR inflicted a heavy blow upon the Chinese economy in August 1960 when
it abruptly canceled Soviet technical assistance and withdrew some 2,000 experts. Soviet
aid projects (some 300, including those supplied by East European countries) constituted
the very heart of China's industrialization program. Practically all the basic plans for
industrial development?for example, the construction of new steel complexes, the
building of new power plants, the development of railways, and the installation of new
chemical plants and oil refineries ? were predicated on these projects.
Although perhaps one-half of these were fully or partly completed and in
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operation by mid-1960, the whole program was undercut by the sudden withdrawal of
Soviet technicians who took the blueprints for plant installation back with them. While
Sino-Soviet trade continued, equipment on order and arriving from the Soviet Union could
not be installed and began to pile up on railway sidings, in warehouses, and in half-
completed factories.
Although the Soviets threatened a more drastic cessation of aid, they did not cut
off trade, even in such strategic commodities as petroleum (for which China was then
heavily dependent on the USSR) and spare parts for China's industry, including military
industry. Indeed, it was the Chinese who took the initiative in the fall of 1960 in cutting
back on trade by phasing out the importation of Soviet complete plants and equipment.
Factors Affecting Success or Failure
The Soviet Union could only prevent the supply of experts and technical assistance
to China from socialist bloc countries. As a result of the Korean War and the associated
US and allied trade embargoes, however, in 1960 China could not obtain many types of
machinery, equipment, and complete plant installations from any other source. The same
applied to technical assistance.
Within three months, however, the Soviet government had second thoughts and
offered to send "any number" of Soviet experts back to China. This reversal was
apparently prompted by the belated realization that, by pulling the experts out, the USSR
had deprived itself of the chief remaining instrument through which it might retain some
leverage or influence on the Chinese leadership and policy. The Soviets also apparently
had some forebodings of the enormity of the consequences, which were to greatly
accelerate the process of separating the Soviet and Chinese economies and societies.
The economic cost of the sanctions to China is difficult to assess. There is no
question that the withdrawal of Soviet experts dealt the Chinese economy a heavy blow
whose effects were felt many years afterwards. Combined with three years of bad
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harvests and the mistakes of the Great Leap Forward, it helped precipitate a domestic
crisis in the years 1960-62, which for a time appeared to imperil the very existence of
the Beijing regime. Although industrial production plummeted, the basic cause of this
crisis was a severe shortage of food reaching famine proportions (the Chinese have
admitted a famine death toll in excess of 10 million at this time) in the disaster areas of
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Results of the Sanctions
Throughout the three-year "time of troubles" from 1960-1962, there was
continuing controversy within China's leadership over the proper response to Soviet
economic pressures. Alternating between defiance and at least tactical accommodation,
the varying character of this response appeared to reflect fluctuating leadership
assessments of the gravity of China's domestic crisis.
_
East and North China. Paradoxically, as the crisis deepened and the Chinese
restructured their economy to give priority to agriculture and maintaining subsistence
levels of food consumption, there was progressively less need for Soviet experts and
technical assistance for China's industry.
Finally, the political consequences of the-Soviet application of economic sanctions
against China were counterproductive. Instead of undermining the Maoist leadership,
Soviet sanctions were exploited by the Chinese as a scapegoat for the regime's economic
failures. A nationwide campaign criticizing Khrushchev and the Soviet Union was
organized in discussion groups extending down to the primary school level. The Chinese
charged the Soviet leader with precipitating China's industrial slowdown (by withdrawing
Soviet technicians); aggravating China's food crisis (by insisting on debt repayment via
expanded Chinese exports of foodstuffs); and attempting to subvert and subdue the
Chinese government (by applying economic pressures). To top it off, the Chinese
propagandists heaped personal abuse on the Soviet leader (employing such epithets as
tipig,11
"donkey," "coward," and "turncoat") and predicted that eventually he would be
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Confronted with famine, popular uprisings, and the threat of disaffection in the
Army, the Chinese responded favorably to the Soviet offer to negotiate a new aid and
trade agreement in November 1960 and, throughout the ensuing protracted negotiations,
ceased polemics and even made a number of conciliatory gestures toward the Soviet
Union. But the help which China had hoped to obtain?principally, 5 million tons of
grain?was not forthcoming. Moscow's refusal of Beijing's request at a time of desperate
need further embittered the Chinese.
After a further period of tactical accommodation in the spring and summer of
1962 (this time prompted by concern over the threat of an American-supported Chinese
Nationalist invasion), the Maoist leadership then decided in the fall of 1962 to launch an
all-out struggle against the "modern revisionist" leadership of the Soviet Union. The
following year, the Chinese began to orient their economy more and more toward the
West and Japan. The large capitalist industrial states increasingly took over from the
Soviet Union the bulk of China's annual foreign trade (see figure). Moreover, as the
Chinese emerged from their economic depression, they began placing in the West long
term orders for complete plant deliveries of the type the Soviets had made .to China in
the past.
Instead of bringing the Chinese to their knees, the final outcome of the Soviet
decision in mid-1960 to impose economic sanctions on China was to bring to an end the
central role the USSR had played in China's modernization and to reorient the Chinese
economy toward the capitalist West.
Conclusions
The USSR's cutoff of aid to China is a case where sanctions not only failed to
achieve their objectives but led to adverse political consequences for their sponsor.
o The Chinese leadership was so committed to its ideological break with
the Soviet Union and to establishment of its own independent
development and foreign policy courses that it was willing to bear the
considerable economic and political cost of the sanctions.
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PRC: TOTAL TRADE TRENDS, 1950-70
?
?
? ?
?
Total Trade
. -
I ?
, ? s
? .,
? '
;Communist
,' Countries
?
?
1 1111111
, ?
? .
? .
?
? $
? $
? ,
$
s
.
,
1
1
1
-*
Non
Countries
I
Communist
?
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55
60
65
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o The sanctions also Provided the Chinese leadership with a scapegoat
for domestic economic problems, thereby reducing their political
impact during difficult times.
o Chinese adjustment to the impact of the sanctions ultimately left
Moscow with limited economic means to influence Beijing's behavior,
a substantial political reversal for the sponsor of the sanctions.
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OAS/US SANCTIONS ON DOMINICAN REPUBLIC (1961-62)
Background to the Sanctions
For 31 years, the Dominican Republic was ruled by what some academics have
called the most absolute dictatorship ever established in Latin America. General Rafael
Trujillo began in 1930 to build' a power base through control?by strong-arm tactics and
bribery?of both the armed forces and the political apparatus as well as of the national
economy. The Trujillo family controlled over half the arable land and four-fifths of the
capital city's businesses, thereby employing three-fourths of the nations' labor force.
By the late 1950s, however, international and domestic forces combined to
undermine Trujillo. Regional sentiment against dictators mounted with the fall of other
such Latin American strongmen as Juan Peron of Argentina in 1955, Marcos Perez
Jimenez of Venezuela in 1958, and Fulgencio Batista of Cuba in 1959. Adding to the
sentiment against Trujillo was the publicity over his allegedly ordering the execution of a
political opponent and his American pilot in 1956. Meanwhile, Washington was becoming
increasingly aware of the growing anti-US sentiment in Latin America which was
highlighted by Vice-President Nixon's unfriendly reception in Peru and Venezuela in
1958. As a result, the Eisenhower administration reevaluated its policies toward Latin
America and began withdrawing support from the Trujillo regime, including cancellation
of arms trade agreements.
Pressure against the Trujillo regime intensified in February 1959 when Romulo
Betancourt?an outspoken critic of Trujillo?took office as the President of Venezuela.
In June 1959, Dominican exiles launched an unsuccessful invasion that Trujillo believed
was Venezuelan-backed. Trujillo lashed out with unprecedented violence against the
exiles and their supporters in the Dominican Republic. Pressed by Venezuela, the OAS'
Inter-American Peace Committee accused the Dominican Republic of "flagrant and
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widespread violation of human rights" including the "denial of free assembly and of free
speech, arbitrary arrests, cruel and inhuman treatment of political prisoners and the use
of terror and intimidation as political weapons." In retaliation for Betancourt's continued
verbal attacks on Trujillo and for alleged Venezuelan assistance in the June invasion,
Trujillo launched his third and nearly successful assassination attempt on the Venezuelan
president.
OAS and US Sanctions
Dominican aggression against Venezuela caused the OAS to initiate sanctions. In
January 1901, the members voted to:
o Break diplomatic relations with the Dominican Republic.
o Partially interrupt economic relations with the Dominican Republic,
beginning with the immediate suspension of trade in arms and
implements of war of every kind.
These sanctions were later expanded to include trade in petroleum, petroleum products,
trucks, spare parts and other commodities.
The United States initially objected to the sanctions, fearing that they would lead
to Trujillo's overthrow and his replacement with a pro-Castro leader. Washington argued
that the OAS should persuade the Dominican Republic to become more democratic and
hold free elections under international supervision. With the other members clearly
opposed to the US approach, and in hopes that the OAS would condemn Cuba in the
future, Washington decided to approve OAS sanctions. In addition to OAS sanctions, the
United States cut back import quotas for Dominican sugar.
The US-supported sanctions, officially imposed to punish Dominican participation
in the Retancourt assassination attempt, were in our judgment constructed so as to force
political liberalization of the Trujillo regime or an end to Trujillo's rule. After Trujillo's
death, the sanctions were used as a tool to rid the Dominican Republic of the Trujillo
family, prevent a right-wing coup, and to press for democratic elections.
The sanctions hit the Dominican economy when already sagging economic
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performance hampered adjustment and the Trujillo regime had turned its attention to
survivaL Real GDP growth, which had averaged 7 percent annually in 1953-58, had fallen
to only 1 percent in 1q59-60 as massive capital flight cut imports sharply. In 1960,
foreign exchange revenues were drawn down by nearly half to $15 million. Moreover,
two-thirds of public expenditures were allocated for defense. In 1961, the sanctions
worsened the economic crisis.
o A shipping crisis occurred when Venezuela refused to admit ships that
had docked in the Dominican Republic and the international seamen's
and longshoremen's unions stopped loading ships bound for the country.
o Oil shortages developed when the Netherlands Antilles halted
shipments of refined petroleum and Shell Oil temporarily suspended
sales in response to pressure from Venezuela.
o Export earnings in 1961 were cut 21 percent, and imports fell another
20 percent in nominal terms.
The Dominicans were able to circumvent some of the sanctions by purchasing arms,
vehicles, and petroleum ? albeit at higher cost ? from Canada, Western. Europe, and the
Middle East. Trujillo also managed to ship coffee to the United States disguised in
Colombian bags, and he planned to build a Dominican refinery with French and US
contractors.
Roueezed by the growing crisis, Trujillo raised taxes, slashed public employee
salaries, cut bonuses, and increased commissions to government officials on all business
transactions. He also used the sanctions as a basis for anti-US propaganda and opened
diplomatic and commercial relations with the USSR and Eastern Europe. In these
circumstances, investor confidence remained in the depths. Economic activity fell 2,2
percent in 1961, and unemployment rose sharply.
The economic deterioration fostered political unrest in the middle and upper
classes, the army?traditional Trujillo supporters?and the Catholic Church. The regime
responded with increased repression and terror. An underground grew rapidly and, on
May 30, 1961, Trujillo was assassinated. Trujillo's inept son succeeded his father while
figurehead president Ralaguer retained his office. With continued economic pressures
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from OAS sanctions and an increagingly vociferous opposition, Trujillo's son resigned
abruptly in November. Trujillo's brothers, dissuaded from taking power by the show of
US naval force off the coast and the antagonism of the armed forces, left the country
with the remainder of the Trujillo family, leaving Balaguer in charge. Balaguer,
considered a Trujillista, encountered widespread domestic opposition. After the United
States threw its support to the opposition, Balaguer was forced to share power with a
seven-member Council of State and promised to resign with the removal of OAS
sanctions. On January 4, 1962, the OAS removed all diplomatic and economic
sanctions.
Conclusions
The OAS sanctions and US sugar quota cutbacks, initiated to punish Trujillo and
force political liberalization in the country, met with considerable success in
exacerbating deteriorating economic conditions and providing fuel for the floundering
anti-Trujillo opposition. Although the assassination of Trujillo cannot be directly
attributed to the sanctions, after his death clear signals of US policy and the
continuation of the sanctions forced the Trujillo family to flee the country.
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Dominican Republic: Current Accounts
and Other Indicators, 1956-61
1956
1957
(million US $1
1958 1959
1960
1961
current Account Balance
-22.1
0.9
-29.4
-27.0
55.8
-97.0
Trade Balance
-4.0
24.7
-12.3
-5.0
80.4
63.2
Exports FOB
121.6
161.0
136.6
130.1
180.4
143.1
Sugar
53.2
88.9
60.5
54.5
88.6
67.2
Imports CIF
-125.6
-136.3
-148.9
-135.1
-100.0
-79.9
Other Indicators
Annual Real GNP
growth ftv,1
10.0
6.3
5.3
0.6
1.3
-2.2
Foreign Exchange
Reserves
25.9
34.1
13.3
97.3
15.4
6.0
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US/OAS SANCTIONS ON CUBA* (1962-Present)
Background to the Sanctions
Almost from the day Castro took power in January 1959, Havana and Washington
embarked on courses of action that inevitably led to conflict. The United States was
first shocked by the circus-like executions of Batista supporters and then alarmed at
Cuban provocations directed against US citizens, property, and policies. The antagonism
grew as Cuba became viewed as the vehicle for Soviet encroachment into the
hemisphere.
The turning point came with the visit to Cuba of Soviet First Deputy Premier
Anastas Mikovan, who signed a trade agreement with the Cubans on February 1.5, 1960.
The agreement was the first of a series of political, military, and economic
understandings that tied Cuba to the USSR. Furthermore, it began the basic
reorientation of Cuba away from its traditional US relationship. On May 7, 1960 Cuba
and the USSR re-established full diplomatic relations.
With these actions and the attacks against US property and interests, US
policvmakers decided to impose economic sanctions. A contingency order had already
been given in March 1960 for Cuban refugees to be organized, trained, and equipped for
possible action.
o In June, in consultation with high-level US Government officials, the
American and British-owned oil refineries in Cuba refused to process
crude oil sent from the Soviet Union. (Cuba retaliated by seizing the
installations.)
o In July, President Eisenhower suspended the remainder of the Cuban
sugar quota for 1960, which amounted to 900,000 tons out of a total of
*The application of economic sanctions was only one set of measures used by
Washington in its relationship with the Castro regime. Other measures included military
action, covert activities, political pressure, and propaganda, which are not addressed in
this paper.
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3.1 million tons, worth approximately $92 million. (The Cubans reacted
by confiscating oroperties of US citizens and companies.)
o During the same two-month period a coordinated decision was made by
the government and US companies to remove key personnel from
American plants in Cuba, a measure designed to put the squeeze on
Cuba's productive capacity and output. (Despite disruptions, this
technical manpower gap was filled by Cubans or foreign specialists. By
August, the Castro regime had seized all American properties on the
island.)
Following the unsuccessful Bag of Pigs invasion in April 1961, US policy toward
Cuba entered a new phase.
o On February 3, 1962 the Kennedy administration imposed a total
prohibition on exports to Cuba except for "foodstuffs, medicines, and
medical equipment for humanitarian reasons."
o On March 23, Washington prohibited imports of merchandise made or
derived in whole or part of products of Cuban origin.
Under the Johnson administration, the anti-Cuban measures already instituted by
the United States were multilateralized through hemispheric approval and support. In
July 1q64, the Organization of American States (OAS) voted to establish the following
sanctions against Cuba:
o The severing of diplomatic and commercial relations.
o The suspension of all trade, direct and indirect, except for foodstuffs,
medicines, and medical equipment.
o The suspension of all sea and air service to and from Cuba.
o The establishment of passport restrictions on travel to and from
Cuba.
Additional sanctions were imposed by the OAS in 1967:
o The recommendation that government-owned or financed cargoes not
be shipped on vessels sailing to Cuba.
o The general call to Western allies to restrict their trade and financial
ties with Cuba.*
Most OAS members adopted the sanctions, but many did not rigorously enforce them.
*See Annex for a listing of the specific sanctions imposed.
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Objectives of the Sanctions
The initial primary objective of the US sanctions was to remove Castro from
power, demonstrated most visibly by the abortive Bay of Pigs invasion. Subsequently, US
policy shifted to a combination of economic and political pressures designed to at least
neutralize Castro and, at best, cause his downfall. The 1962 missile crisis did not change
this thrust. US officials publicly and privately stated their belief that Cuba posed a
potentially grave security threat to the United States, directly because of its ties with
the international Communist movement and indirectly because of its support for
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The basic structure of the Eisenhower-Kennedy Cuban policy changed little during
the Johnson administration. The Johnson administration followed the example of its
predecessors by treating the Castro regime as temporary. The United States publicly
portrayed the overall goal of its policies to be the establishment of "a truly free and
independent Cuba which, under a government democratically chosen by the people, will
live in peace with is neighbors."* US officials also publicly identified four specific goals,
indicating that US objectives had become more diverse over time: (1) to weaken the
Castro regime; (2) to discredit the Cuban economic model and make Cuba pay a high
economic price for its conduct; (3) to contain the spread of Castroism; and (4) to make
Soviet support of the Castro regime so costly in political and economic terms that the
Soviets would realize the futility of continuing their burdensome commitment there or of
assuming similar commitments elsewhere in the hemisphere.
US policy goals toward Cuba did not change significantly during the Nixon
* Robert M. Sayre, Deputy Assistant Secretary of State for Inter-American Affairs,
"Review of Movement of Cuban Refugees and Bemis heric Policy Toward Cuba,"
Department of State Bulletin, May 3, 1966, p. 712.
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administration.* Nevertheless, enforcement of the economic sanctions became
increasingly difficult. The onset of the Vietnam war had revised Washington's foreign
policy priorities and efforts to enforce the embargo became less aggressive over time.
The Castro regime not only had demonstrated its staying power but had gradually
abandoned its support for revolutionary movement in the hemisphere. Indeed, Havana
launched a broad campaign to normalize its economic and political relations with other
nations in the hemisphere as well as in Africa, Asia, and Europe. Moreover, the Nixon
administration launched its overture to China.
As a result of these events, pressures began to build against continuation of the
policy of isolation. In the early 1970s, a number of US Congressmen began urging
normalized relations with Cuba. In 1972 five hemispheric nations recognized Cuba, in
the face of the OAS ban on relations. In 1974, the United States agreed to permit the
first major exception to US embargo regulations by permitting sales to Cuba by US
subsidiaries in third countries. Other exceptions followed.
By the mid-1970s, therefore, it had become apparent that the broad application of
economic sanctions and other measures aimed at the isolation of Cuba was no longer
possible. In August 1975, the OAS passed a resolution that allowed each member to
determine for itself the nature of its economic and diplomatic relations with Cuba. The
United States voted in favor of the resolution.
Economic Impact of the Sanctions
In our judgment, the Cuban embargo, in its early years, was significantly damaging
to Cuba's growth and general development. Prior to the embargo, Havana was extremely
* See Congressional testimony by administration spokesmen in: U.S. Congress, House of
Representatives, Cuba and the Caribbean Hearings Before the Sub-Committee on Inter-
American Affairs, Committee on Foreign Affairs (Washington, D. C.: Government
Printing Office, 1970); U. S. Congress, House of Representatives, Soviet Naval
Activities, Hearings Before the Sub-Committee on Inter-American Affairs, Committee
on Foreign Affairs (Washington, D. C: Government Printing Office, 1971); U. S. Congress,
Senate, United States Policy Towards Cuba, Hearing Before the Committee on Foreign
Relations (Washington, D. C.: Government Printing Office, 1971).
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dependent on trade with the United States (see Figure 1). The loss of this natural trading
partner caused serious dislocations throughout the economy.
Havana's hard currency earnings suffered greatly from the loss of the US market
for sugar?its major export. Since most large sugar importers had long-established
contracts with sugar producing nations, Cuba could not make sizable sales to other hard
currency purchasers. With low export revenues from its major crop, Cuba was forced to
reduce drastically its imports from the West. Havana turned to the socialist bloc for
trade, and by 1965 this group of countries accounted for 76 percent of Cuban trade, up
from less than 3 percent in 1957 (see Figure 2).
The rapid shift in the direction of trade caused a multitude of domestic production
problems. Probably the single most damaging effect of the embargo was Cuba's inability
to obtain the needed spare parts and raw material inputs for its almost entirely (90
Percent) US-produced capital stock. Other problems emanated from a lack of
complementarity between Cuba's import needs and Bloc export capabilities. Often the
kinds of machinery and raw material imports that Cuba needed most were in short supply
within the Bloc. Not infrequently, the quality of Bloc imports was unsuitable, either due
to poor production processes or because products were unsuitable to the Cuban climate,
technological orientations, or methods of use. Hundreds of pieces of Soviet farm
equipment were junked because they were designed for continental crops planted in rows
of different widths than the Cubans used.
While it is not possible to quantify the cost of the embargo to Cuba, we believe it
was at least partially responsible for the decreases in production experienced by Havana
during the 1960s (see Table 1).* Other factors included irrational and inefficient planning
systems and the flight of skilled technicians. In addition, the embargo had a significant
impact on the Cuban lifestive since the Cuban people were overwhelmingly dependent on
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* Recently Cuba has publicly claimed that the embargo has caused total losses to its
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Figure 1
Cuban Trade wah the US
100 -
90 -
50 -
40 -
30
10-
0
Caoarto to UV oo2 of Iota ? Boorto
j000rto frost % Z f TAAL alike kart.
1956
1957 1958 1959 1960 1961 1962
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80
60
40
20
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FLgure 2
TotaL Trade by Major Area
97.4
24.3
26.7
33.1
32.2
30.0
41.4
40.9
33.7
25.3
17.5
16.5
25.7
21.0
..6..
,e
.2
e11.2.1
,..--e-.0-????:;?p"
0,,i.V.51
777
,112.5d
4.50
%-?''''
P
7777
;19.61
/7
777P
7777
ISA,
?01.9,
?p_99.0
./??.
;19.91
;111.9:
7777'1,113.0e
,,,Iy?
,..,
e
r
e
?
e .
7777
?mg..;
:r
e41.1d
,r777:4, "
::?&?11.'
00.".
e
59 e
'
51.7
(
e7 1
1
70
7
7
7
7
76
7
7
7
el
Non-Ccsasuntst
IZI Other Clesiountst.
? 1=3 SoviArl, Untan
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TABLE 1
alba: Production of Major Agricultural and Industrial Products
Indices, adjusted for population growth
1957=100
1961
1962
1963
1964
1965
Sugar
111.0
77.8
60.4
68.7
93.2
Rice
76.3
72.9
70.3
41.3
16.3
Beans
169.8
156.2
89.6
71.9
55.0
Citrus
47.2
59.8
65.7
69.2
65.7
Beef and
Veal
98.1
49.5
54.7
64.6
69.4
Whole Milk
83.6
70.4
68.9
72.7
64.3
Pork
33.2
26.2
25.6
33.2
36.4
Cigars
40.3
70.5
80.8
131.4
136.6
Leather
Footwear
21.5
49.3
82.7
87.3
71.9
Detergents
Q3.1
, 119.7
89.6
120.8
78.5
Cotton
Textiles
155.2
179.3
112.0
156.3
114.7
Paper and
Cardboard
217.2
226.4
214.0
227.8
200.8
Cement
124.6
109.6
111.8
108.0
104.6
Nickel
60.9
112.7
96.5
110.7
134.1
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US consumer goods and foodstuffs. Domestic production was oriented toward export
goods and after the implementation of the embargo imports of consumer goods were
severely limited due to reduced foreign exchange earnings.
The effects of the embargo have diminished considerably over time, however.
Cuba's capital base now consists largely of Soviet, East and West European, and Japanese
machinery and equipment. Consumer goods are more readily available from both the
East and from improved domestic production capabilities. In addition, Havana has
opened several front companies which enable it to obtain various types of US products,
particularly consumer goods. Industrial, agricultural, and transportation activities are all
now relatively traffected by the disruptions and diversions of resources originally
associated with the embargo.
The costs of the embargo to the United States were minimal. Washington readily
obtained alternate suppliers for Cuban sugar. In addition, US exports to Cuba were
small?l.8 percent of total US exports in 1957.
Political Impact of the Sanctions
The imposition of sanctions in the 1960s did little to weaken then-Prime Minister
Castro's internal political position. Indeed, the benefits probably outweighed the
disadvantages. Sanctions implied a grave external threat, which Castro exploited to
carry out the radicalization of all Cuban political, economic, and social institutions. In
an atmosphere of national peril, most Cubans were ready to accept radical change in a
spirit of sacrifice.
Those on whom the economic weight of the sanctions would ordinarily fall directly
were no longer of economic or political importance?having either fled the country or
been discredited and forced from active political life?or had cast their lot with the
revolutionary government and supported its policies. Long after the sanctions had lost
their economic impact, the Castro regime continued to extract political capital by
blaming virtually every economic problem on them. Even today, Cuba is attributing its
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need for debt rescheduling to the economic damage allegedly wrought by the US
sanctions.
Results of the Sanctions
In our judgment, the US and OAS economic sanctions, by themselves or in
conjunction with other measures, have not met any of their objectives. We also believe
that Western economic sanctions have almost no chance of compelling the present Cuban
leadership?mostly guerrilla warfare veterans in power since the late 1970s?to abandon
its policy of exporting revolution. Not only are these veterans deeply committed to
armed struggle, but they also see revolution abroad as protective of Cuba by redirecting
US attention toward regional "hot soots." This is the basis for Che Guevara's theory of
"creating many Vietnams."
We believe the current Cuban leadership reacts to sanctions and other external
Pressures not by reducing foreign subversive adventures but by stepping up such
activity. Unless Western pressures coincide with Soviet pressures on Havana, sanctions
are not likely to have the desired limiting effect on Cuban policy until the "guerrilla
elite" now in control in Havana passes from the scene.
Conclusions
The outcome of the US economic sanctions against Cuba in many ways parallels
that of the USSR's sanctions against China.
o The Castro regime was so committed to its revolutionary policies that
it was willing to bear the considerable economic cost of the sanctions.
o The sanctions provided Castro with a scapegoat for all kinds of
domestic problems; in fact, he exploited the threat they posed to gain
acceptance of radical changes in all aspects of Cuban society.
o Cuban adjustment to the impact of the sanctions left the United States
with limited economic means to influence Havana's behavior.
In addition:
o OAS participation in the sanctions did not change the results because
their additional economic impact was minimal and enforcement
became increasingly lax.
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o The economic cost to the Soviets of backstopping Cuba were great but
not treat enough to force their withdrawal of support for Castro.
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ANNEX-Economic Sanctions Applied Against Cuba as of 1975
1. The OAS Sanctions (None of these has effect by itself; all need support by laws
and regulations of the individual states:)
- Member states are called upon to suspend all trade with Cuba, except
for foodstuffs, medicines, and medical equipment; and to suspend all
sea transportation between their countries and Cuba except that
necessary for humanitarian reasons (under Authority of the Rio Treaty,
Resolution 3 of the Ninth Meeting of Consultation of Ministers of
Foreign Affairs 1964).
Recommendation is made that OAS member states deny bunkers and
government cargoes to ships in the Cuba trade (under OAS charter,
Resolution III 10 of the Twelfth Meeting of Consultation of Ministers of
Foreign Affairs, 1967).
- Recommendation is made that friendly non-member governments
restrict their commercial and financial operations with Cuba, as well
as sea and air transport with that country, especially transactions and
transport conducted by state entities (recommendation under OAS
charter, Resolution III 2 of The Twelfth Meeting of Consultation of
Ministers of Foreign Affairs, 1967).
2. Restrictions on US Citizens and Entities
Section 620(a) of the Foreign Assistance Act of 1961, as amended,
authorizes the President to "establish and maintain a total embargo
upon all trade between the United States and Cuba." Although in
actual practice provision is made for exceptions for humanitarian
purposes, a near-total embargo on such trade is maintained under
regulations which include:
Export Control Regulations. Issued under the authority contained in
the Export Administration Act of 1969 (previously the Export control
of 1949) and other laws, these regulations prohibit any unlicensed
direct or indirect export from the United States to Cuba except for
humanitarian shipments of certain foodstuffs, medical supplies and
inexpensive gift parcels. This includes parts and components exported
from the United States for use in the manufacture of a product for
export to Cuba. Licenses are normally not issued.
Cuban Assets Control Regulations. Issued under the authority
contained in Section 5 (b) of the 1917 Trading with the Enemy Act and
other laws, these regulations:
- Prohibit the direct or indirect import or export of any property in
which Cuba or a Cuban national has any interest.
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- Prohibit, without a license from the US Treasury, any vessel under the
control of US citizens or their foreign subsidiaries from engaging in the
Cuba trade.
- Prohibit American companies that own foreign petroleum installations
in their own name from bunkering or having any dealing with vessels
registered in or under charter or lease to Cuba.
Block Cuban assets in the United States, prevent use of US financial
facilities by Cuba or Cuban nationals, and prohibit Americans,
including those who are officers and directors of foreign subsidiaries of
US companies, from engaging in any financial or commercial
transaction with Cuba without Treasury license.
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- Where there are no American officers and directors, the American
company is asked to support US foreign policy by preventing its foreign
subsidiary from engaging in such transactions. This "moral suasion" has
been successful.
Transportation Order T-1. Issued under the authority contained in the
Defense Production Act, this order prohibits US registered vessels and
aircraft from carrying to Cuba any commodity on the United States
Positive List, the United States Munitions List, or under the control of
the Atomic Energy Commission without appropriate authorization.
3. Restrictions on Foreign Citizens and Entities
Under Section 620 (a) (1) of the Foreign Assistance Act of 1961, as
amended: US assistance under the Act is prohibited to the present
Government of Cuba and to countries that furnish assistance to that
Government. This can be waived if the President determines such
assistance is in the national interest.
Under Section 620 (a) (3) of the Foreign Assistance Act of 1961, as
amended: US assistance under the Act shall be terminated to countries
that fail to take appropriate steps to prevent ships or aircraft under
their registry from carrying any goods to or from Cuba. This can be
waived if the President determines it important to national interests.
Under the Mutual Defense Assistance Control Act of 1951 (The Battle
Act): US assistance is prohibited to any country that permits strategic
exports to any nation threatening the security of the United States.
Cuba was included within the terms of the Battle Act as of November
1962.
- Under Section 103 of the Agricultural Trade Development and
Assistance Act of 1954, as amended (Public Law 480): US sales of
agricultural commodities under Title I of the Act are prohibited to
countries that sell, furnish, or permit their ships or aircraft to carry
any equipment, materials or commodities to or from Cuba, except that
with respect to the selling, furnishing, or transporting -ofi?nedical
supplies, non-strategic raw materials for agriculture and non-strategic
agricultural or food commodities, sales agreements may be entered
into if the President finds with respect to each such country that such
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sale is in the national interest, informs the Congress of his reasons for
such finding, and publishes his reasons and findings in the Federal
Register.
- Under NSAM-220: Shipments owned or financed by the US Government
should not be shipped from US ports on a foreign flag vessel that has
called in Cuba since January 1, 1963 unless the persons controlling the
vessel give satisfactory assurance that no ships under their control will,
henceforth, be employed in the Cuba trade so long as it remains the
policy of the US Government to discourage such trade.
- Under the Export Administration Act of 1969: Department of
Commerce regulations issued under the authority contained in this Act,
prohibit the unlicensed bunkering or servicing in US ports of vessels of
Communist countries, including Cuba, or vessels that have been denied
access to US Government cargoes by reason of their having been
engaged in the Cuba trade since January 1, 1963. In accordance with
the recommendation of the Twelfth Meeting of Consultation of Foreign
Ministers of the American States, licenses for bunkers are denied to
ships that have called in Cuba since September 24, 1967. Additionally,
resale by foreign firms of US commodities (including ship stores, plane
stores, and bunkers) to Cuba is prohibited unless specifically authorized
by the Department of Commerce.
4. The Following is Related to Cuba Directly
No aid shall be given under the Foreign Assistance Act or any sugar
quota given to any government of Cuba except as deemed necessary by
the President in the interest of the United States until Cuba pays
compensation for expropriated American property.
- Under Section 301 (b) of the Foreign Assitance Act of 1961, as
amended: The President shall seek to assure that no US contribution to
the United Nations Development Program shall be used for projects for
economic or technical assistance to Cuba as long as it is governed by
the Castro regime.
- US assistance to Cuba is also restricted under Section 620 (f) of the
Foreign Assistance Act of 1961, as amended, which circumscribes aid
to Communist countries (specifically including Cuba) unless the
President finds and reports to Congress that, 1) such assistance is vital
to US security, 2) the country is not controlled by the international
Communist conspiracy, and 3) such assistance will promote the
recipient country's independence from international Communism.
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UK/UN SANCTIONS ON RHODPSIA (1985-79)
Background to the Sanctions
White Rhodesian opposition to sharing power with the country's black majority set
the stage for the UK-led imposition of economic sanctions against Rhodesia in November
1985. Pressured by rising worldwide anticolonial sentiment after World War II, the
United Kingdom hammered out a new constitution for Rhodesia in 1961. Among other
things, this established a complex franchise system that immediately created 15
parliamentary seats for blacks and could have led eventually to black majority rule.
Seeking a quicker and more complete power transfer, however, black nationalist groups
(led by Joshua Nkomo of the Zimbabwe African Peoples Union) rejected the new
constitution and for the first time resorted to violence against white property.
Conservative whites formed the Rhodesian Front in March 1982, and this party?aided by
an election boycott by blacks?won power at the end of that year.
The political platform of the Rhodesian Front was to remove the threat of black
nationalism and gain independence from the United Kingdom. Ian Smith, who had risen
to leadership of the Rhodesian Front by April 1964, pushed London to accede to a formal
application for independence that had been made by the party leadership in 1963.
Although the British Government was not averse to independence for Rhodesia, a
stalemate quickly developed over the role of black Rhodesians after independence.
Britain sought five conditions:
o Maintenance of the principles and intention of progress toward
majority rule, already enshrined in the 1961 constitution.
o Guarantees against retrogressive amendment of the constitution.
o Immediate improvement in the political status of blacks.
o Progress toward ending racial discrimination.
o Acceptance by the Rhodesian population as a whole of any proposed
basis for independence.
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Following two trips by Smith to London and a visit by UK Prime Minister Harold
Wilson to Salisbury in futile attempts to iron out differences, the Smith government
announced a unilateral declaration of independence on 11 November 1965. Prime
Minister Wilson imposed economic sanctions against Rhodesia on the afternoon of the
same day.
Britain imposed a second set of sanctions in December 1965, and the United
Nations followed with sanctions in December 1966 and May 1968. The UN resolutions
were passed without dissent. Both resolutions included reminders to member states that
failure or refusal to implement the measures would constitute a violation of their
obligations under the UN Charter. All states were called upon to report measures taken
to implement the resolutions, and a Security Council committee was established to
gather information on the evasion of sanctions.
Description of the Sanctions
UN sanctions complemented those imposed by Britain and eventually encompassed
a cutoff in all trade, transport of Rhodesian goods, and funding to Rhodesia (see table
1). In addition to the four major sanctions measures, both the United Kingdom and the
United Nations passed supplementary legislation and resolutions designed to tighten and
increase their effectiveness. In January-June 1966, the United Kingdom made purchases
of several Rhodesian products by anyone in the world a violation of British law. The UN
Security Council passed roughly a dozen additional sanctions measures after May 1968.
Some of these covered loopholes in transportation, financing, and franchising, while the
remainder simply duplicated items in Resolutions 232 and 253.
Objectives of the Sanctions
The Wilson government's stated objectives were to end the Smith rebellion and
restore legitimacy so that ultimately the country could be granted independence under
majority rule. Wilson wished to unseat Smith ("There can be no truck with this illegal
regime or any compromise with it.") rather than just induce a return to negotiations. The
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Table 1
United Kingdom and United Nations
Sanctions Measures against Rhodesia 1965-68
United Kingdom November 1965
o Ban on sale of arms, including spare parts
o Cessation of economic and military aid
o Removal from the sterling area
o Ban on export of capital
o Denial of access to the London capital market
o Ban on further coverage by the UK Export Credits Guarantee
Department
o Suspension from the Commonwealth Preference Area
o Cutoff of purchases of Rhodesian sugar and tobacco (which together
accounted for two-thirds of Rhodesian exports to the United Kingdom)
United Kingdom December 1965
o Cutoff of purchases of several minerals (including copper, chrome, and
asbestos) and foodstuffs (corn and beef)
o Blockage of dividend, interest, and pension payments to Rhodesian
citizens
o Replacement of the Board of Governors of the Reserve Bank of
Rhodesia with a British board located in London, and assumption by this
board of control of Rhodesian funds outside Rhodesia
o Cutoff of sales of petroleum and petroleum products, accompanied by a
request to other countries for similar action
United Nations (Resolution 232) December 1966
o Ban on the purchase by UN members of Rhodesian asbestos, iron ore,
chrome, pig iron, sugar, tobacco, copper, meat, meat products, hides,
skins, and leather
o Ban on the sale to Rhodesia by UN members of arms, military
equipment and materials, aircraft, motor vehicles and equipment, and
petroleum products
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Table 1 - continued
United Kingdom and United Nations
ganctions Measures Against Rhodesia 1966-68
United Nations (Resolution 2531 May 1968
o Ban on all imports from Rhodesia
o Ban on all exports to Rhodesia, except medical and educational supplies
o Ban on the transport of Rhodesian exports and imports
o Cutoff of investment and all other funding to Rhodesia
o Cutoff of airline connections to and from Rhodesia
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objectives of the subsequent UN sanctions were worded differently: to "end the rebellion"
and to "avoid assisting the illegal regime."
Wilson had several unspoken objectives aimed both at domestic British
constituencies and at world opinion. Holding a slim four-seat margin in the British
parliament, Wilson wanted to head off any growth in pressures for military intervention
which might endanger his consensus with the Tory parliamentary opposition on the
sanctions issue. Many in the British Liberal Party and some in the left wing of Wilson's..
own Labor Party already were pressing for much stronger measures against Rhodesia.
Their views coincided with those of many Third World countries. Additional objectives
not directly articulated by the Wilson government included:
o Forestalling the use of force by other countries.
o Maintaining Britain's positive image and reputation in the international
community.
o Taking a stand for morality and justice.
o Reducing the chances that Zambia might cut off copper shipments to
British industry if Britain failed to punish Rhodesia.
o Reducing the likelihood of retaliation against whites in other African
countries.
The UK and UN sanctions were targeted against the 225,000 white Rhodesians.
Besides controlling the government, this group dominated the economy. White farmers
produced all of the country's principal export crops; and white businessmen owned the
mines, factories, transport facilities, and most of the wholesale and retail distribution
system. Had sanctions worked as intended, they would also have severely hurt the __
welfare of the country's 5 million blacks. Roughly half of these depended on low paying
jobs in white-owned businesses for at least part of their subsistence.
Compliance with the Sanctions
In many respects, Rhodesia appeared to represent a nearly ideal target for
sanctions:
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o Exports were concentrated in a small number of primary products?
tobacco, sugar, and a few minerals?and only three markets?the
United Kingdom, Zambia, and South Africa.
o Imports were concentrated in one product area?machinery and
transport equipment?and were purchased largely from two countries?
the United Kingdom and South Africa.
o Overall, foreign trade accounted for a sizable percentage of Rhodesian
GNP.
o The British economy was not critically dependent either on supplies of
raw materials from Rhodesia or on the Rhodesian market.*
As it turned out, however, the sanctions were severely undermined because Rhodesia's
African neighbors, Japan, the United States, and many European countries?including the
United Kingdom?were unwilling or unable to abide by them. Moreover, the United
Kingdom and the United Nations were unwilling to enforce them militarily.
South Africa, which faced the threat of sanctions because of apartheid, openly
helped Rhodesia circumvent the sanctions during the entire 14 years they were in
effect. Pretoria continued to trade with Rhodesia and provided critical imports, such as
oil, as well as transport and other entrepot services to the landlocked country. We
estimate that at least two-thirds of the goods moving between Rhodesia and South Africa
for much of the period originated or ended up in world markets with false documentation
provided mainly by South African middlemen. The similarity between Rhodesian and
South African traded goods as well as South African laws prohibiting importers from
disclosing the ultimate destination of their purchases enhanced the ability of middlemen
to obscure the Rhodesian connection.
Other African countries also breached the UN embargo.
o Disguised trade channels similar to those through South Africa were
available to Rhodesia in Portuguese Mozambique until its independence
in mid-1975.
* Several Western companies, however, were dependent on specific primary exports
from Rhodesia. For example, Union Carbide of the United States and Foote Mineral of
the United Kingdom depended on Rhodesia for chrome ore, Turner and Newall of the
United Kingdom used Rhodesian asbestos, and Kroof Mull of West Germany relied
exclusively on graphite from Rhodesia.
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o Zambia?Rhodesia's largest 1965 export market?continued to trade
with Rhodesia and to use its transport facilities until 1973. Then in
October 1978, after a five-year hiatus, transport bottlenecks on the
alternative Benguela and Tazara railroads forced Zambia to resume
transshipments via Rhodesia. This probably enabled some Rhodesian
goods?particularly white corn, light manufactures, and coal?to find
their way to Zambian markets.
o Other black African neighbors?Botswana, Malawi, and Zaire?
maintained economic relations with Salisbury in spite of UN
sanctions.
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The West and Japan did not vigorously enforce sanctions, especially during the
initial years of application. Indeed, much of the billing and payment for Rhodesia's trade
with the West was channeled through Swiss banks; Swiss middlemen apparently remained
important conduits until the sanctions were lifted, although their government banned
such activity in January 1978. A 1978 report sponsored by the British Government
accused the United Kingdom's two largest oil companies of supplying petroleum products
to Rhodesia until 1976?first through South African middlemen, then via a complex swap
arrangement with a French company in then-Portuguese Mozambique. The United States
resumed its role as the leading importer of Rhodesian chrome and several other minerals
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The countries that evaded the Rhodesian sanctions generally had, or gave, strong
reasons. These mostly reflected their assessments of their own best economic and
political interests combined with the inducement of strong price incentives offered by
Rhodesian businessmen:
o The US Congress passed the Byrd Amendment on the ground that
chrome was "the one item which could and should be imported from
Rhodesia that is vital to the national security of the United States."
* Although only chrome was mentioned during the Congressional hearings and debates,
the general license issued by the Department of Treasury on 25 January 1972 authorized
imports of chromium ore, ferrochrome produced in any country from Rhodesian
chromium ore, and any other material of Rhodesian origin determined to be "strategic
and critical." Rhodesia produced 22 of the 72 minerals on the US list of "strategic and
critical" mineral products, and many of these were imported while the Byrd Amendment
was in force.
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o Portugal viewed continuing relations with Rhodesia as a stabilizing
factor in southern Africa. This was important to Lisbon while it was
still trying to maintain control of Angola and Mozambique through the
mid-1970s.
o Switzerland felt that compliance with the sanctions would violate its
long-standing policy of neutrality.
o Cutting trade ties with Rhodesia would have caused severe economic
dislocations in Malawi, Botswana, Zambia, and Zaire.
Results of the Rhodesian Sanctions
The UK and UN sanctions against Rhodesia failed to achieve the stated objectives
of either Prime Minister Wilson or the UN Security Council. Indeed, as time passed and
the Rhodesian economy flourished, the United Kingdom narrowed its stated objectives
for the sanctions. Instead of ousting the Smith regime Britain's goal became that of
keeping pressure on Smith to negotiate. Even that objective was questioned. By 1972,
Sir Alec Douglas-Home, Foreign Secretary of the then-Conservative government, said "I
do not honestly think that sanctions are the main influence which brings Mr. Smith to the
negotiating table."
Following the first full year of sanctions, the Rhodesian economy performed well
for almost a decade. Real GDP growth averaged 6.5 percent annually between 1965 and
1974; below-average economic performance occurred only in drought years.
To achieve this pace, the government took a larger role in the economy through a
formidable array of organizations and controls.
o Development corporations were set up to provide financing and
technical expertise for industrial, mining, and agricultural enterprises.
o Efforts to find new export markets and to evade sanctions were
centralized.
o The Rhodesian Government assumed extensive owers in resource
allocation and control of wages and salaries.
Import substitution flourished and contributed to the economic resiliency. By
1970, manufacturing had replaced agriculture as the leading nonservice sector, owing to
a 50-percent overall growth over the five-year period. As a result, virtually all essential
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consumer items and some intermediate and capital goods were supplied domestically,
thereby saving Rhodesia valuable foreign exchange. Indeed, import volume did not match
or exceed the 1965 level until 1973.
On the export side, only agricultural sales suffered badly during the sanctions
period. The embargo crippled tobacco sales, Rhodesia's single largest foreign exchange
earner. This was because tobacco was too easily traced to the source and could not,
therefore, be passed through foreign middlemen to the world market. The sharp decline
in tobacco earnings, -as well as a need to reduce dependence on imported food, caused the
government to encourage growers to switch to corn and wheat production.
Sanctions initially hurt chromium, Rhodesia's second-largest export earner.
Despite a sharp downturn in output during the late 1960s, however, the US decision to
end its embargo?the Byrd Amendment?and the skirting of trade impediments by other
Western countries, allowed production to outstrip presanctions levels by 1972.
Other nonagricultural exports generally held their own. Copper and pig iron sales,
for instance, were hurt little by sanctions because of new markets in Western Europe and
transit with South African bills of lading. The majority of Rhodesia's nondurable
manufactures were sold to South Africa and were not affected.
Following the unilateral declaration of independence, South African funds and an
involuntary boost in domestic investment allowed Rhodesia to largely replace traditional
sources of capital. With remittances to US, British, and Canadian parent companies
prohibited by the Smith government, profits had to be reinvested rather than
repatriated. As a result, total domestic investment surged from 13 percent of GDP in
1964 to an annual average of 20 percent during the first half of the 1970s.
In addition to the reinvested earnings, some $500-750 million in new foreign
investment flowed in, mostly from South Africa. Adherence to the boycott by
international bankers and foreign donors made Salisbury almost totally dependent on
South Africa for these and other financial flows. Concessional aid and access to
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Pretoria's private capital markets enabled the Rhodesian Government to finance its small
budget deficits.
The Civil War Years
Beginning in 1975, Rhodesia was beset by a new round of troubles that wreaked
economic havoc. The main factors were an escalation of the protracted civil war and the
Zambian and Mozambican closure of their borders with Rhodesia. The ensuing
uncertainty and the erosion of the middle class market because of white emigration
weakened the investment climate. Moreover, international demand for Rhodesian
commodities sagged with the recession in Western markets. The economic downturn that
began in 1975 persisted for five years. With the real economic decline averaging 3
Percent annually, per capita income had tumbled 24 percent by 1979.
Government reactions to the war also had profound implications, as the mounting
diversion of resources into defense undercut economic growth. The defense portion of
the budget rose from 19 percent in 1975 to a peak of 32 percent in 1979, pushing the
overall budget deficit from $4 million in 1975 to over $700 million in 1979. The
stimulative effects of rising defense expenditures were more than offset by the reduction
in producer and consumer subsidies, the boost in personal income taxes, and the
mandatory purchase of war bonds to help cover these deficits. Moreover, the shift of
scarce foreign exchange to military-related purchases reduced financial resources for
local businessmen, even as the diversion of skilled white manpower from industry and
agriculture worsened an already bad labor situation.
External factors also undermined the embattled economy. The Zambian border
closure during 1973-78 had deprived Salisbury of transshipping fees, but, by itself, this
did little harm. More serious was the decision in 1976 by the new Machel government in
Mozambique to close its borders with Rhodesia. This action forced a rerouting of trade
through South Africa that increased Rhodesia's freight payments about 50 percent
annually.
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Beyond the internal and regional forces, the deteriorating international economy
also took a heavy toll. Demand by developed countries for most of Rhodesia's exports
slumped as world oil prices soared. Trade sanctions caused Rhodesia to suffer
disproportionately, as buyers switched to more dependable suppliers. In addition, largely
because of technology changes, Rhodesia was unable to replace the US chrome market
lost to it after the 1977 repeal of the Byrd Amendment.
Whether the sanctions were a significant factor in the ultimate switch to majority
rule, 14 years after they were imposed, is questionable. Without the escalating civil war
after 1975, the Rhodesian economy probably would have continued to achieve a
performance acceptable to the white population despite sanctions. Nonetheless,
combined with the civil war and the persistent diplomatic pressures of the United States,
? United Kingdom, and ultimately even South Africa, the Smith government probably
factored in the difficulties caused by sanctions in its decision to capitulate.
By imposing sanctions, the Wilson government probably achieved some of its
unstated objectives. Thus, the imposition of sanctions served?at least initially?as an
effective expression of morality and justice and probably helped maintain a positive
international image for Britain. As time passed and the sanctions proved ineffective in
bringing Rhodesia to heel, these initial results were severely eroded. Third world
countries, in particular, expressed frustration over London's unwillingness to resort to
military force.
After Majority Rule
Ironically, the longer term outcome of the Rhodesian sanctions was to leave the
Smith government's successors with far more diversified and stronger manufacturing and
agricultural sectors than would otherwise have been likely. By 1975, the investment of
retained earnings by Rhodesian companies plus South African investment had developed
Rhodesian manufacturing sufficiently to meet most domestic consumer needs and provide
exports to South Africa and other neighboring countries. Because of the enforced switch
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from tobacco to grain crops, Rhodesia not only strengthened its self sufficiency in food
production, but also became (along with South Africa) one of Africa's only two consistent
net food exporting countries.
Conclusions
The failure of the UK and UN sanctions to achieve more than a few unstated ?
and certainly not primary ? objectives illustrates the difficulties of enforcing sanctions
even against a target that appears highly vulnerable.
o The sanctions were not fully enforced by any of the major
implementing parties.
o Neither the United Kingdom ncr the United Nations was willing to use
military force.
o A key supplier of the value to be withheld by the sanctions ? South
Africa ? did not participate and, in fact, openly flouted the sanctions.
o Largely because of South Africa's role, the Smith government's
prohibition against profit repatriation by foreign-owned companies, and
Salisbury's centralization of economic authority, the Rhodesian
economy adjusted quite well to the sanctions that were enforced.
The fact that the Smith government gave way after 14 years appears much more the
result of the civil war and heavy diplomatic pressure than of the domestic impact of
sanctions.
Even though unintentional, the sanctions ultimately turned out to be beneficial
from the viewpoint of both the sponsors and the target because they left Rhodesia, now
Zimbabwe, with a much stronger economy than would otherwise have been likely.
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FRENCH SANCTIONS ON ALGERIA (1971)
Background to the Sanctions
In April 1971 France imposed sanctions against Algeria in an effort to resolve a
dispute over oil prices and the nationalization of French oil holdings. The issue arose
when a 1985 oil agreement granting oil and gas concessions to France in return for aid in
industrial development and exploration came UP for renegotiation in 1970. The Algerian
Government claimed that France was not fulfilling all of its obligations in connection
with exploration, industrial development, and the import of Algerian gas into Prance.
In July 1970 Algeria unilaterally announced an increase in the tax-reference
price* of oil from $1.08 to 52.85 per barrel. In the fall of 1970 it called for $3.00 and by
the end of the year was demanding $3.24. Furthermore, Algeria asserted that the price
issue was secondary to its objective of taking over control of oil production from the
French companies involved. After protracted negotiations, the Algerian Government
broke the deadlock in February 1971 and unilaterally announced that it would take over
51 percent of French oil production?accounting for about 70 percent of total Algerian
crude oil production?and all pipelines and gas wells in the country.
According to press reports, the French Government initially decided to make the
best of the situation and seek the highest possible remuneration for seizures. Following
fruitless talks between the two governments, however, Algeria announced in April 1971
that:
o It was raising its oil price to 53.80 per barrel (the highest price of any
oil Producer in the world).
o It would pay only 5100 million to French oil companies as
compensation for the 51-percent takeover of their assets (about a
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seventh of what the French companies had estimated their lost assets
to be worth and a third of what they were willing to settle for).
o It was ending all foreign-owned concessions in Algeria.
The French Government responded by cutting off negotiations with the Algerian
Government, and the French companies involved?the state-owned Elf-Erap and the 35
percent state-owned French Petroleum Company (CFP)?suspended their liftings of
Algerian oil.
Objective of the sanctions
The objective of the sanctions was to force the Algerian Government to
reconsider compensation terms and the tax-reference price of oil. The French
calculated that their actions would lead to an immediate drop in revenue. The French
companies involved produced in 1970 some 660,000 b/d of crude oil out of a total
Algerian production of 960,000 b/d.
Description of the Sanctions
The French boycott cost the Algerians a production drop of at least 25 percent in
1971. In addition to suspending their lifting of Algerian oil, the companies took action on
the international oil market by issuing warnings that they would sue any buyers of oil
from the fields seized by Algeria, which they considered to be their property. The
French Government also approached the World Bank, from which the Algerian state oil
firm Sonatrach was seeking financing for petroleum development, to block any extension
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of credits. Finally, it appealed to the United States to forgo a planned purchase of gas
from Sonatrach until the oil dispute was settled.
Factors Affecting the Success or Failure of Sanctions
The effectiveness of the French sanctions was undermined by developments in the
world oil market, where rising prices enabled the Algerians largely to offset the losses
resulting from production cutbacks. Moreover, the French could not win the full support
of their allies. Although the United States proved willing to delay the purchase of
Algerian gas by the Texas El Paso firm?a decision also influenced by the high Algerian
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asking price?both US and Rritish firms reached agreements with Sonatrach on the
exploitation of their own, smaller oil concessions in Algeria.
French determination to uphold the sanctions was eroded by the disproportionate
cost of the measures to their own interests. Prior to the imposition of sanctions,
Algerian oil accounted for 25 percent of total domestic consumption. French energy
policy, which did not provide well for alternative sources of supply, made it difficult for
France to quickly find oil substitutes to make up for the Algerian shortfall. Its loss was
Particularly serious for the Elf-Erap firm, for which it represented 80 percent of total
Production. In addition, the sanctions strained Franco-Algerian trade relations generally
and encouraged Algeria, which had relied heavily on trade with France, to diversify its
trading partners (for example, by developing prospects for large-scale exports of oil and
gas to the United States). The sanctions also strained the "special relationship" between
Algeria and France. This was of special concern to France since Paris considered Algeria
an important link to the Arab world.
Results of the Sanctions
The net result of these converging pressures was the collapse of the sanctions.
First CFP?in June 1971?and then Elf-Erap?in December 1971?agreed to most Algerian
terms. CFP settled for a share of oil amounting to half its 1970 production, and Elf-Erap
accepted a share equal to only one-third of its pre-nationalization production. Four
small companies agreed to withdraw completely from the Algerian industry.
Compensation for the nationalization was close to Algeria's original terms. The tax-
reference price was raised to $9,.8049.95 per barrel, with a provision for renegotiation
after five years.
Sonatrach, on the other hand, emerged as the tenth most important oil producing
company in the world. Algeria itself has emerged as one of the leading price hawks in
OPEC. Its victory over sanctions in 1971 almost certainly contributed to this
aggressiveness.
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Conclusions
In the French boycott of Algerian oil almost none of the factors needed for
successful.sanctions was present.
o France was not Algeria's only customer and could not gain the full
support of the others.
o France's commitment to the sanctions was eroded because it could
not readily replace Algerian oil, which was a significant portion of
French supplies, and because the sanctions strained the "special
relationship" with Algeria, which Paris considered a key link to the
Arab world.
? The cost of the sanctions to Algeria was minimal because rising world
oil prices enabled the Algerians to offset most of the revenue loss
resulting from the reduction in export volume.
o The Algerian Government remained strongly committed to taking
over control of its oil production.
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OAPEC OIL EMBARGO ON THE UNITED STATES (1.973-19741
Background to the Sanctions
The Arab oil exporting nations embargoed the United States during and after the
1967 Middle East war but to no effect. The United States used its domestic spare
capacity in conjunction with stepped-up imports from non-Arab oil producers to meet its
oil requirements. The Arabs were unable to withstand the loss of oil revenue for an
extended period and soon lifted the embargo.
By October 1973, however, the United States had become vulnerable to an Arab
embargo. Three important developments had taken place:
o US oil demand increased steeply while domestic production fell.
o Increased world oil demand reduced world spare capacity.
o Oil prices quadrupled.
Between 1967 and 1973 the US energy intensive industries boomed and most of the
increased energy demand was for oil. Environmental laws and federal regulation limited
the mining and use of coal, the construction of nuclear power plants, and natural gas
production. US oil output peaked in 1970 and fell thereafter; Arab oil imports rose as a
result.
Until 1970 world oil supply usually exceeded demand. In the early 1970s, however,
the economies of the major industrial countries expanded simultaneously and soaked up
the excess supply.
The surge in oil demand and growing assertiveness by OPEC revolutionized oil
pricing. In 1971, producer governments forced the oil companies to raise oil prices.
Then, on 16 October 1973, OPEC uniliaterally hiked the price from $3.01 to $5.12 a
barrel. Demand continued to outrun supply and three months later OPEC raised the price
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to t11.65. Oil revenues flowed into producing countries at unprecedented rates, giving
OAPEC members sufficient financial reserves to withstand a prolonged embargo.
Description of the Sanctions
On 6 October 1973, Syria and Egypt invaded Israeli-occupied Arab territory.
Israel suffered military reversals in the first days of the war and asked the United States
to resupply it with arms.
On 17 October, the members of the Organization of Arab Petroleum Exporting
Countries (0APEP)* decided to: (1) embargo the United States, (2) shut-in the oil
normally shipped to the United States and reduce production an additional 5 percent, (3)
determine an importer's access to Arab oil according to its level of support for the Arab
cause and (4) make further monthly production cuts of 5 percent until Israel relinquished
all Arab territory.**
On 18 October the United States announced that it would resupply Israel with
arms. Saudi Arabia, which had counseled OAPEC to be moderate, reacted by reducing its
oil production an additional 5 percent and assuming leadership of the embargo.
Enforcement
OAPEC governments ordered foreign oil companies to enforce the embargo and
threatened them with expropriation and other punitive measures if they failed to
comply. To insure compliance, OAPEC members required tanker captains loading Arab
oil to sign affidavits designating their destination and to cable back upon arrival. Arab
diplomats abroad also checked public records of oil imports. OAPEC members did not
establish a mechanism to monitor each other's observance of the boycott; nonetheless,
virtually no Arab oil reached the United States during the embargo.
* OAPEC consists of Saudi Arabia, Iraq, Kuwait, Libya, Algeria, Qatar, the United
Arab Emirates, Bahrain, Syria, and Egypt.
** Iraq subsequently refused to reduce its production, but it did participate in the
embargo.
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?
?
Objectives of the Sanctions
OAPEC members stated three objectives for the sanctions:
o Express their anger at the United States for assisting Israel.
o Demonstrate solidarity with Egypt and Syria.
o Make the United States press Israel to return Arab land.
The act of imposing sanctions allowed OAPEC to accomplish the first two
objectives. As to the third, Egypt regained sovereignty over some of its territory while
the sanctions were in effect, but the United States did not ask Israel to make territorial
concessions in order to induce the Arabs to lift the embargo.
The OAPEC linkage between the sanctions and repatriation of Arab land loosened
after the war ended in late October. Saudi Arabia, the largest oil exporter and the key
to maintaining the embargo, indicated that total Israeli withdrawal was not a condition
for lifting the sanctions. It did insist, however, that Israeli withdrawal begin.
In November, the United States launched a diplomatic effort to disengage Arab
and Israeli forces. Egypt and Israel concluded an agreement in mid-January that required
Israel to pull back in the Sinai. Henry Kissinger, who mediated the agreement, asserts in
his memoirs that the sanctions did not influence US diplomacy. Israeli Defense Minister
Moshe Dayan's memoirs corroborate Kissinger.
The United States felt that the agreement met the Saudi condition for ending the
embargo. However, Syria quickly petitioned the Saudis to extend the embargo until the
United States attempted a Syrian-Israeli disengagement. The United States refused to
commence negotiations while the embargo was in effect. In February, an Arab summit
conference offered a compromise; OAPEC would agree to end the embargo if the United
States sent a diplomatic mission to assess the prospects for a Syrian-Israeli
disengagement. The United States agreed, and OAPEC lifted the embargo on 19 March
1974.
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Impact of the Sanctions
The Arab sanctions led to widespread fuel shortages in the United States. The
sanctions had an impact because (1) non-Arab exporters did not have sufficient spare
capacity to compensate for Arab production cutbacks and (2) the Arabs had the financial
reserves to maintain the embargo for an extended period.
Three factors, however, mitigated the sanctions' impact:
o The oil companies used their worldwide transportation and marketing
networks to reallocate the available oil. By diverting some non-Arab
oil from Europe and Japan to the United States and replacing it with
OAPEC production, they prevented the United States from losing the
maximum possible amount of oil.
o At the time, US dependence on Arab oil was modest. The sanctions
cost the United States 1.3 million b/d of oil or 7% of its total oil
consumption. The American people experienced discomfort but not
hardship.*
o The US commitment to Israel had broad support. Throughout the
embargo, the public never pressed the government to change its
Mideast policy to meet Arab demands.
Results of the Sanctions
The embargo awakened the United States to the costs of importing substantial
amounts of oil. During and after the embargo, the United States began making major
adjustments in its domestic and foreign policies to try to reduce its vulnerability to
future sanctions. The United States:
o Initiated a variety of programs to conserve energy, develop synthetic
fuels, and increase oil, gas, and coal production.
o Helped create the International Energy Agency to foster energy
cooperation among the industrial oil importing countries.
o Assumed a more active role in the Middle East to prevent a diplomatic
stalemate that could trigger another war and renewed sanctions.
* The oil companies' allocation measures caused Western Europe to lose about 12
percent of its total oil consumption; they permitted Japan to increase its consumption by
about 10 %.
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The embargo had a powerful demonstration effect on other industrial countries.
Most were heavy consumers of Arab oil and lacked the capacity to substantially reduce
their dependence. Western Europe and Japan waged vigorous diplomatic campaigns to
cultivate OPEC members As a result, they voiced greater support for Arab positions.
The sanctions greatly enhanced the international prestige of the Arab oil
exporters and OPEC in general. OAPEC had used oil to punish a military superpower
with impunity. The less developed countries saw it as a turning point in international
relations. They soon enlisted OPEC support in an attempt to make the industrial
countries create a "new international economic order" favorable to the Third World.
Conclusions
In terms of its effectiveness the OAPEC oil embargo on the United States
presents a paradox. Few of the elements needed for achieving substantial economic
impact were present.
o The Arab oil exporters were not able to control the supply of oil to the
United States.
o The United States was able to adjust to the embargo with relatively
little economic dislocation.
o The United States remained committed to its support for Israel.
Yet, OAPEC members could legitimately claim that the embargo met their
objectives.
o The goals of expressing anger at the United States and demonstrating
solidarity with Syria and Egypt were symbolic and easily met by
imposing the embargo.
o The goal of making the United States pressure Israel to return Arab
land was also largely symbolic because Washington was already
committed to this end.
As it turned out, the oil price increases had a more substantial economic impact on the
United States than the embargo.
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US SANCTIONS ON PAKISTAN (1977-88)
Rackground to the Sanctions
The imposition of sanctions against Pakistan in the late 1970s involves a number
of factors that appear to make it a special case. First, the objective on the part of the
US Government was highly specific?namely, to discourage the Pakistani military regime
from pursuing a nuclear weapons program. Other aspects of Islamabad's foreign and
security policies or even its domestic politics and human rights record were not relevant
to the decision to impose sanctions. Second, the sanctions were diverse, involving not
only the prohibition of all nuclear cooperation but also the termination of US
Government assistance in the areas of military and economic aid. Third, some of the
sanctions have been removed while other restrictions still remain in effect. The
Prohibition against nuclear cooperation is still in force, but economic and military
assistance programs involving or requiring US Government financial support resumed as
of December 1981.
A crucial factor that complicates any long-germ assessment is that expected
developments in the Pakistani nuclear program could triggr the reimposition of
economic and military sanctions within a short period of time. The rationale and legal
foundation for the original sanctions remain operative. US political leaders can
authorize a total embargo on assistance programs any time the pace of the Pakistani?
nuclear program seems to warrant this step. The possibility of a reimposition of
economic-military sanctions could still influence the decisionmaking process within the
Pakistani military regime concerning the immediate need for a nuclear weapons device.
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The Sanctions: Origin and Scope
The imposition of sanctions against Pakistan in 1978 and 1979 was an outgrowth of
the broad Congressional-Executive effort in 1976-1978 to codify laws governing nuclear
exports and to make US nonproliferation policy more stringent. The relevant US
legislation does not single out Pakistan, but growing concern about the direction of the
Pakistani nuclear program was an important factor in stimulating proposals for tougher
laws on nuclear transfers to nonnuclear weapons states. The French decision in early
1976 to sell Pakistan a commercial-scale reprocessing plant was a major turning point.
The Ford and Carter administrations put considerable pressure on the French
Government to cancel the contract even though Pakistan had agreed to place the facility
under International Atomic Energy Agency safeguards. In June 1978 Paris informed
Washington that French firms would withdraw from the reprocessing plant project. We
believe this step was taken not in response to US wishes but primarily because of the
risks in being associated with the nuclear weapons ambitions of a right-wing military
regime.
US Government efforts to restrict relations with Pakistan were based on the
following legislation:
o The Symington and Glenn Amendments to the Foreign Assistance Act
of 1961.
o The Nuclear Non-Proliferation Act of 1978.
The fundamental purpose of this legislation was to pose the threat of sanctions to
persuade states that had not already ratified the Non-Proliferation Treaty to (a) accept _
IAEA safeguards over their entire nuclear program and (b) refrain from procurement
activities that could contribute to a nuclear weapons program. Congress and the
Executive Branch were essentially in agreement on these basic goals, although opinions
varied about the ultimate motives of potential proliferators such as Pakistan.
The prohibition against all nuclear cooperation with Pakistan resulted from the
automatic aoplication of section 118 of the Nuclear Non-Proliferation Act of 1978. This
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section stipulates that there can be no nuclear exports to any nonnuclear weapons state
that has not placed all its nuclear activities under IAEA safeguards at the time of
export. Islamabad's longstanding refusal to accept safeguards on all its existing nuclear
facilities required 12E facto the total and immediate ban on US nuclear transfers to
Pakistan.* This prohibition took effect on 10 March 1978 when the Act came into
force.
Termination of economic and military assistance to Pakistan resulted from the
Glenn and Symington Amendments. The Glenn Amendment to the Foreign Assistance
Act (section 6701 requires such sanctions against any nonnuclear weapons state that
acquires reorocessingL technology or detonates a nuclear device. This amendment was
never formally invoked, but the US Government ordered a winding down of economic aid
in 1977 in reaction to the French-Pakistani reprocessing plant project. Economic
assistance was resumed for 1978-79 after the French decision to withdraw from the
reprocessing project.
The eventual termination of all US Government economic and military assistance
to Pakistan resulted from the application of the Symington Amendment. This
amendment to the Foreign Assistance Act (section 669) stipulates that a nonnuclear
weapons state that has obtained uranium enrichment technology outside IAEA safeguards
can no longer receive economic or military assistance from the US Government.
Discovery of evidence of the existence of Islamabad's clandestine enrichment facility
near Kahuta led to the imposition of economic and military sanctions for nearly three
years beginning in March 1979.
Objectives of the Sanctions
There were three publicly stated objectives for the imposition of sanctions on
Pakistan:
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o To discourage the Pakistani military regime from pursuing a nuclear
weapons program.
? o To slow development of the program by persuading other nuclear
weapons states not to export sensitive nuclear materials, equipment,
and technology to Pakistan.
o To demonstrate that the United States would withhold nuclear
cooperation and economic and military aid from a nonnuclear state
which is attempting to develop nuclear weapons.
Results of the Sanctions
In our judgment the imposition of the sanctions failed to achieve the first
objective. Pakistani President 7,ia and his top military advisers were not deterred from
their fundamental objective of obtaining a nuclear weapons capability. Islamabad
steadfastly resisted safeguards over ifs entire nuclear program, and Pakistani scientists
continued efforts to develop both reprocessing and enrichment technology?the two
routes to a nuclear weapons capability. Moreover, there was no incentive to slow the
effort to develop a nuclear weapons capability once it became evident that the US
Government wished to resume economic and military aid to Pakistan in the wake of the
Soviet invasion of Afghanistan Although the nuclear sanctions remain in effect,
economic and military aid resumed as of December 1981.
Impact of the Sanctions
On a political level, the military regime in Islamabad appeared to reap additional
public support in the wave of reaction against the US sanctions in 1971. The Pakistani
leaders felt no compelling need to rely on the United States prior to the Soviet invasion
of Afghanistan later that year. They had taken steps to develop strong ties with China
following the downturn in US-Pakistani relations in the mid-1960s. In the 1970s, Pakistan
also looked more to moderate Arab states and Iran for financial assistance and to
European suppliers for arms.
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history of bilateral relations and the widespread belief among Pakistanis that the United
States had failed them in two wars with India.
The sanctions appear to have reinforced Islamabad's doubts about the credibility
of the US security commitment to Pakistan as enunciated in the defense cooperation
agreement of 1959.*
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military assistance, if anything, confirmed Pakistan's intention to develop a nuclear
weapons capability. Islamabad regards such a capability as the ultimate guarantor of its
security against India whose conventional supremacy and nuclear potential it cannot hope
to match. With the United States unavailable as a counter to India and the Chinese
unable to supply sophisticated arms, Islamabad placed a high value on nuclear weapons as
an effective deterrent that was attainable with Pakistan's technological and financial
resources.
The cutoff in US economic aid occurred at a time when Pakistan's foreign
payments position was becoming increasingly precarious following several years of heavy
borrowing. Foreign exchange reserves had dropped by one-half between December 1978
and July 1979 to $183 million and continued to slide to a mid-September low of $77
million, roughly one week's import coverage. While US aid was small relative to
Pakistan's needs ? scheduled 1979 disbursements of $130 million vs. a financial gap of
$1.3 billion ? it was provided on very soft terms. Nevertheless, after vaguely
threatening to default on debt service payments in an effort to secure a new debt
rescheduling agreement from a group of Western creditors, Pakistan was able to bolster
its international reserves by negotiating short-term credits from foreign private banks
and soliciting emergency assistance from Saudi Arabia.
President Zia ridiculed a tentative US offer in early 1980 to provide $400 million in
emergency economic and military aid following the Soviet invasion of Afghanistan. This
offer was made by the Carter administration without having obtained Congressional
approval to waive the restrictions under the Symington Amendment.
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Despite the lack of US aid, by June 1980 Islamabad had covered its foreign
payments gap and increased foreign exchange reserves to nearly $700 million. Islamabad
used planned and emergency aid from Saudi Arabia, a $163 million Trust Fund loan from
the IMF, and borrowed short-term funds against export earnings of the next rice crop.
Moreover, good crops, strong export growth, and several key economic policy refoms
enabled the economy to grow 6 percent in FY 1980 for the third consecutive year.
Pakistan reduced its current account deficit in both 1980 and 1981.
Military Assistance
The termination of military aid probably reduced US influence within the
Pakistani military establishment as a result of the suspension of the IMET training
program for promising officers, but it had no appreciable effect on Pakistan's military
capabilities. The amount of US arms supplied to Islamabad after 1965 was negligible and
largely paid for in cash. Since the US arms embargo during the 1965 India-Pakistan war,
China and France had become Pakistan's principal arms suppliers. From FY 66 through
FY 79 Pakistan purchased less than $430 million in military equipment from the United
States, much of it spare parts and ammunition for older US weapons. The only
significant military items purchased from the United States during this time were TOW
anti-tank missiles and M-113 armored personnel carriers, bought in 1975 and 1976.
The Symington Amendment did not preclude cash military sales. Even before the
sanctions were applied, only $7.6 million of Pakistan's total arms purchases from the
United States were funded by Foreign Military Sales (FMS) credits, and none since FY
68. Pakistan signed cash FMS agreements worth t88 million in FY 80 and FY 81 after
the Symington Amendment sanctions were applied, but only for spare parts, ammunition,
and support equipment. Moreover, the Symington Amendment did not preclude the
delivery of military equipment already purchased. Pakistan received about $130 million
in military equipment, including TOWs and armored personnel carriers from FMS
agreements concluded prior to the sanctions.
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Nuclear Sanctions
Nuclear relations between Pakistan and the United States were virtually non-
existent when the Nuclear Non-Proliferation Act of 1978 went into force. The main
effect of the Act's prohibition of nuclear transfers to Pakistan fell on the US voluntary
contribution in cash and kind to the International Atomic Energy Agency, an annual gift
used to finance technical assistance and training programs for developing nations. Since
the contribution was funded under the Foreign Assistance Act, the United States decided
that the provisions of the Symington Amendment made Pakistan ineligible for any US
funds provided via the IAEA on a country-specific basis. This assistance included the
provision of experts, gifts of equipment for laboratory facilities, and fellowships for the
study of nuclear-energy-related subjects in the United States. The training and technical
assistance which the United States denied to Pakistan through the IAEA was instead
provided by European countries.
The United States has succeeded to a considerable extent, however, in meeting its
secondary objective of making it more difficult for Pakistan to achieve a nuclear
weapons capability. Washington continued efforts to persuade other nuclear supplier
states not to export sensitive nuclear materials, equipment, and technology to Pakistan
? efforts that would not have been credible in the absence of US nuclear sanctions. This
attempt to win support for tighter export controls was a source of tension and
disagreement with other nuclear suppliers for a number of reasons:
o Several West European countries as a matter of policy are opposed to
trade restrictions even with regard to nuclear transfers to a potential
proliferator.
o Few West European countries accept the principle that a nonnuclear
item should be controlled on the ground that it could contribute to a
nuclear weapons program. As a result, the United States has found it
difficult to interdict trade with Pakistan involving dual-use equipment
or gray area technology.
o Other nuclear supplier states have until recently resisted US efforts to
make the export control lists more precise and more comprehensive.
The London Suppliers Guidelines in many instances are too vague to
serve as a useful guide to the implementation of export control policy.
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o Some countries have not been willing to devote the law enforcement
resources needed to prevent Pakistan from operating a clandestine
procurement network in Western Europe. Through the use of
intermediaries, false shipping addresses, dummy companies, and other
techniques, Pakistan has been able to conceal in many instances that it
is the ultimate user of items being bought.
Nevertheless, Pakistan is less prepared to explode a nuclear device 'at this time
than it would have been had Islamabad been free to advance its nuclear program through
open procurement and trade. A number of nuclear supplier states were sensitive to the
issue of nuclear cooperation with Pakistan and took steps to prevent some sensitive
nuclear transfers. As a result, Islamabad is now almost totally dependent on the
clandestine procurement network. Plans to complete and operate the enrichment- and
reprocessing facilities designed to produce weapons-grade nuclear material have been
delayed.
The United States is still trying to get Pakistan to accept safeguards on all its
nuclear facilities. Washington has urged other nuclear supplier states not to submit bids
for Pakistan's new nuclear power reactor without the stipulation that Islamabad must
accept "full scope" safeguards. Several Western governments, however, have made it-
clear to the United States that they fear they might be undercut by competitors at the
last moment and lose the contract. Nevertheless, the concern about Pakistan's
unsafeguarded facilities and the IAEA's inability to maintain effective safeguards at
Pakistan's only power reactor near Karachi is now widespread. There are no
international legal obligations for any nuclear supplier to insist on full scope safeguards
but failure to make this demand of Pakistan at this point would expose the supplier state
to considerable criticism.
Pakistan's leaders are not likely to relinquish their objective of obtaining a nuclear
weapons option even if the United States succeeds in fashioning a united supplier front on
the issue of full scope safeguards. However, the rejection of full scope safeguards would
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seriously impede Pakistan's plans for a larger nuclear power program. The Pakistanis
could and probably would turn to other developing nations with nuclear expertise for
assistance, but this strategy would take years to bear fruit.
Conclusions
o The US sanctions against Pakistan did not halt Pakistan's nuclear
program, but the fact that the United States took tangible action and
reinforced it with efforts to sensitize other nuclear supplier states has
caused Islamabad to be almost totally dependent on the clandestine
procurement network and has slowed development of its nuclear
program.
o The sanctions imposed under provisions of the Foreign Assistance Act
did not have a major impact , on Pakistan's military preparedness or
economic development because 'aldstan was able to adjust to the
absence of US aid for the short period of its suspension in part because
other donors, including multilateral institutions supported by the
United States, provided alternate sources of military and economic aid.
o The Government of Pakistan was willing to forgo US assistance in order
to continue its efforts to develop nuclear weapons because it perceived
nuclear weapons as a vital element in its national security.
o Imposition of US sanctions in a highly visible way increased domestic
support for the Government of Pakistan thus easing the political cost
of the forgone aid.
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US TRADE SANCTIONS AGAINST UGANDA (1978)
Background to the Sanctions
The United States imposed trade sanctions on Uganda in October 1978 in response
to a lengthy series of human rights violations by Ugandan President Idi Amin. According
to US Government estimates, Amin had murdered nearly 100,000 people?including two
American reporters?since seizing power in a military coup in 1971. He also had expelled
almost all of Uganda's 60,000-member Asian community, crippling the country's domestic
trade.
The decision to impose sanctions capped a year-long campaign by a small group of
Congressmen who in September 1977 introduced three bills to terminate all trade
between the United States and Uganda. Statements in The Congressional Record
indicate particular concern about US purchases of Ugandan coffee?half of Kampala's
total coffee exports at the time?which were cited as an important element in Amin's
ability to stay in power. The statements also pointed out the role of US companies in
supplying nearly 40 percent of Uganda's oil imports, in constructing a
telecommunications satellite system, and in providing civilian jet aircraft and pilot
training. According to Ugandan statistics, the United States was Uganda's largest
trading partner in 1977, accounting for one-third of the value of Kampala's international
transactions.
Efforts to obtain approval of embargo legislation were held up by the lack of
support in both Congress and the White House.
President Carter's opposition to Ugandan sanctions was based on a number of factors.
o The United States had already demonstrated its distaste for the Amin
regime by closing its embassy in Kampala and suspending all official US
assistance.
o Washington was monitoring Ugandan trade by requiring the
Departments of State and Commerce to review US export licenses and
determine whether the export item would contribute to human rights
violations.
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o Amin might retaliate by taking measures threatening the safety of the
200 Americans still in Uganda.
o Economic sanctions would be ineffective and inconsistent with the
principle of free trade.
Over the next several months, however, an intensive anti-Amin campaign by the
American media gradually aroused public opinion in favor of sanctions, with a similar
impact on Congress.
Provisions and Objectives of the Sanctions
The sanctions contained in Public Law 95-455 of October 10, 1978, applied to
nearly all US trade with Uganda and directed that:
o No article, including technical data or other information, except grains
and additional foodstuffs could be exported to Uganda by anyone
subject to the jurisdiction of the United States.
o No article grown, produced, or manufactured in Uganda could be
imported into the United States.
These proscriptions were to remain in effect until the President certified to Congress
that the government of Uganda was "no longer engaged in a consistent pattern of gross
violations of human rights."
While an end to human rights violations in Uganda was the stated objective of the
sanctions, we believe the Congressional testimony on the legislation indicates that there
was a major unstated objective as well. That goal was to put enough pressure on the
Ugandan economy to undercut Amin's control and thereby result in his ouster as
president.
Impact of the Sanctions
Uganda was in desperate financial strains during this period and, being landlocked,
it was dependent on the pro-US government of neighboring Kenya for its international
trade. Most of the modern sector of the economy had long since shut down, following the
expulsion of Asians and Amin's indiscriminate persecution of Uganda professionals.
Agriculture kept the economy going, but production had been declining as farmers
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reduced output to subsistence levels.
Despite its economic problems and heavy dependence on the US market, Uganda
suffered little from the US trade sanctions. Ugandan officials had been aware for some
time of official US sentiment regarding Amin's policies because of the steps taken by the
Carter administration and the discussions in Congress. According to Embassy sources,
Ugandan envoys were visiting numerous Western and other countries as early as January
1978 to line up new customers for coffee and other products. Indeed, by the time
sanctions were in place, US companies had almost completely ended commercial dealings
with Kampala. In addition, the Kenyan Government continued to provide transit for
Ugandan trade. Official data indicate Ugandan efforts to locate other buyers were
largely successful?export receipts during the embargo showed no change from the
similar period immediately preceding the sanctions. Most of the slack was taken up by
other Third World countries, although Japan, the United Kingdom, West Germany, and
Italy also stepped up purchases somewhat (see table 1).
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Uganda's ability to obtain petroleum imports. Official Ugandan data show a steady
decline in oil deliveries, reflecting in our judgment a reluctance by other international oil
companies to allow Kampala to purchase oil on credit. Embassy sources report that, as a
result, the government had to contend with more frequent fuel shortages and associated
disruptions in public transportation.
Results of the Sanctions
Although sanctions did not directly bring about a change in Ugandan Government
policies or the government itself, Embassy reporting suggests the embargo did have an
indirect role in Amin's political demise. According to conversations between senior
Tanzanian and US Embassy officials, Washington's decision to terminate commercial
dealings with Kampala was an important factor in Tanzanian President Nyerere's decision
to opt for a direct military campaign to remove Amin in October 1978. Nyerere believed
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Table 1
UGANDA
Destination of Exports, 1977-1978
Exports
Change
Industrial Market Economies
Percent of Total
1977
1978
Australia
2.6
3.6
+1.0
Canada
.6
.3
-.3
West Germany
1.7
3.5
+1.8
France
5.9
5.7
+.2
Italy
3.3
4.7
+1.4
Japan
3.7
8.3
+4.6
Netherland
2.4
1.7
United Kingdom
19.5
21.5
+2.0
United States
40.4
9.2
-31.2
Other
2.2
.6
-1.6
Non-Market Industrial Economies
Total change
(Excluding the United
2.0
1.5 1.2
1.2
+8.4
States)
+2.0
-.3
+1.2
Hungary
Poland
USSR
Total
change
+2.9
Capital Surplus Oil Exporters
Libya
1.1
2.7
+1.6
Total
change
+1.6
Middle & Low Income Countries
Kenya
.3
1.8
+1.5
Others
15.4
31.9
+16.5
Total
change
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the sanctions were a sign that the international community would not oppose his invasion
of Uganda.
Conclusions
On the surface, the US trade sanctions against Uganda had little going for them.
o The United States was unable to gain the cooperation of other
governments in shutting off trade.
o Uganda was able to find other suppliers and burrs of most of the goods
traded with the United States.
Yet, the sanctions ultimately?even if indirectly?achieved the objective of
bringing about a change in the Ugandan Government because of the political impact they
had in a third country.
o President Nyerere of Tanzania interpreted the sanctions to mean that the
international community would not oppose his invasion of Uganda to remove
Amin by force.
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US SANCTIONS ON IRAN (1980-81)
Origin and Scope of the Sanctions
The United States imposed economic sanctions on Iran as part of a larger
diplomatic strategy to force the release of the American hostages seized by Iranian
militants on 4 November 1979. The immediate objective of the sanctions was to create
sufficient economic pressure on Iran to force it to release the hostages.
Three 'days after the embassy was taken, President Carter ordered a halt to all US
oil imports from Iran. As the crisis dragged on, the administration also blocked all
Iranian assets under US control and informally curtailed some exports to Iran?
particularly military equipment already paid for by Tehran. US impatience with
Khomeini's intransigence with respect to settlement proposals from both Washington and
the United Nations culminated in Carter's formal prohibition on 7 April 1980 of all
exports to Iran except food and medicine. In fact, a de facto trade embargo was already
in place because US longshoremen had earlier refused to load cargo?even food?bound
for Iran.
The most controversial US sanction was the blocking of all Iranian assets in the
United States and those under the control of US banks, businesses, and individuals outside
the United States. The objectives of this action were, initially, to protect US asset
claims from Iranian default and, later, to pressure Iran to release the hostages. The US
decision froze about $12 billion of Iran's bank deposits, gold, and other property under US
control; about $5.6 billion of these deposits and securities were held in overseas branches
of US banks, mostly in the United Kingdom. By taking the extraordinary step of
obstructing the use of these overseas accounts, the United States doubled the amount of
Iranian assets it could immobilize?including nearly one-half of Iran's official foreign
exchange reserves.
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To make the sanctions work the United States needed the cooperation of its
allies. To this end US representatives visited several European countries to discuss the
sanctions from the outset of the crisis. The United States also asked the UN Security
Council in January 1980 to adopt restrictions on trade and financial transactions with
Tehran, and in April Secretary of State Vance met in Washington with representatives
from 25 countries to seek a commitment to the sanctions.
Concerned about their own self-interest and the wisdom of Washington's hard-line
economic position, the allies' response was less than enthusiastic. They feared the
sanctions would threaten their substantial contractual arrangements with Iran and
generally were skeptical that sanctions would force Tehran to free the hostages. Japan,
and to a lesser extent, Western Europe counted on Iran to meet oil import needs.
Following the Soviet veto of the UN resolution, the EC and Japan reluctantly adopted a
diluted version of the sanctions they had earlier approved during the Security Council
discussion.
Although some allies gave tacit approval to the asset freeze, they never did agree
to the tougher measures that Washington wanted them to impose. Generally, the EC
agreed at its ministerial meeting in May 1980 to ban:
o All export contracts retroactive to 4 November, excluding food and
medicine.
o All new industrial service contracts.
o All new supplier credits, loans, or credit guarantees.
The EC measures also included some financial restrictions on Iranian bank accounts and
on the purchase of Iranian oil at prices sharply higher than the OPEC benchmark. Japan
announced similar sanctions in June 1980. These sanctions did not block Iranian assets in
the allies' banks, contained loopholes, and were not strictly enforced. Moreover, neither
the EC nor Japan embargoed oil imports from Iran.
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Domestic Impact of the Sanctions
The rationale for the economic sanctions was Iran's heavy dependence on foreign
trade. In 1979, the United States was Tehran's second largest source of imports,
following West Germany; the OECD countries accounted for about 70 percent of Iran's
imports in 1979. Iran relied on imports to meet most of its requirements for capital
goods, industrial raw materials, military equipment, and consumer goods. Iran's most
critical import needs at the time of the sanctions were for food and for spare parts for
the oil industry.
The economic sanctions apparently had no effect upon Iran's decision to hold the
hostages. Khomeini's response to the sanctions was even more vituperative than his usual
criticisms of the United States. Indeed, Khomeini reportedly appeared ecstatic over
Carter's break of diplomatic relations, calling it a "final victory" for Iran. His control of
this emotionally-charged issues was so great that Iranians were probably willing to (or
could be coerced into) suffering economic costs far in excess of those exacted by the
sanctions. If anything, the hostage crisis consolidated the revolution in the hands of
Khomeini and the clerics.
The sanctions exacerbated economic problems in some sectors of the economy but
did not inflict major new hardships or create insurmountable difficulties. Tehran
managed to find alternative sources for many denied goods?albeit at much higher
prices. In other cases, Iran either rationed or fell back on inventories. Because of the
generally depressed state of the economy, Iran probably would have cut back on imports
of most trade categories in any event.
The only sector of the economy to suffer notably from US economic sanctions was
the transportation sector, which faced a critical shortage of spare parts. By June 1980,
about half of the civil aircraft fleet?composed mostly of Boeing and McDonnell Douglas
aircraft?lacked sufficient spare parts. The railroads also were in desperate need of
spare parts for their American-made locomotives. Iran suffered a general shortage of
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car and truck parts as well.
Stopping the supply of oil field equipment to Iran did not substantially affect
already depressed crude output. The revolution had put the petroleum industry in
disarray; the oil worker strike during January-March 1979 and Khomeini's decision to
lower oil exports caused oil production to tumble 40 percent to an average of 3.2 million
b/d for 1979. During most of 1980, the high price for Iranian oil in the face of a soft
world oil market was the main reason oil exports fell further to about 1.6 million b/d; the
other reason was Iraqi war damage. Nonetheless, Iran had sufficient spare parts and
excess capacity to keep its oil fields and refineries operating at these reduced levels of
production without US equipment or technology; even with the sanctions, oil industry
equipment often could be obtained legally from third parties and foreign subsidiaries of
US companies.
Oil income of about $33 million a day gave Iran the financial wherewithal to cope
with the sanctions. Even without US oil purchases, Iran's oil earnings?which accounted
for virtually all Iran's income?were more than sufficient to cover the import bill in 1980,
which was up 34 percent from 1979. Although oil exports to other developed nations also
declined, these countries still provided an important market for Iran's oil.
Iran easily circumvented US and EC sanctions on trade. Increased food shipments
from France, Germany, and Australia more than made up for the loss in US foodstuffs,
which had accounted for about one-fifth of Iran's food purchases abroad before the
sanctions. Food imports from the OECD in 1980 rose 30 percent over 1979 to $1.2
billion. Tehran also turned to the Third World for new sources of food.
Several West European, Japanese, and even US firms traded embargoed goods with
Iran in violation of the sanctions, usually through intermediary firms in the UAE and
Kuwait. Supply arrangements covered a wide range of industrial goods, capital
equipment, and chemicals all of which fell under the sanctions. US involvement included
the sale of goods such as engine parts, tires, appliances, and drilling rigs.
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The blocking of financial assets did not significantly worsen Iran's economic
problems, in part because Iran radically changed its portfolio management policies.
Markazi, Iran's central bank, increased its holdings of gold as a reserve asset.
The
share of Iran's official reserves not frozen by the United States amounted to about $8
billion?the equivalent of almost a year's worth of 1980 imports. In fact, Iran increased
its reserve holdings during the period of the sanctions.
Longer Term Impact on Trade
While the sanctions had little short-term impact on Iran's ability to procure
needed imports, they did refocus Iran's trading patterns. The sanctions accelerated the
shift of trade from the West begun before the hostage crisis. To offset the impact of the
sanctions and to lessen its dependence on the industrialized West, Iran signed economic
agreements with several Third World countries. Largely as a result, the OECD share of
Iranian imports fell from 83 percent in 1978 to 66 percent in 1980.
Iran also strengthened its economic relations with Eastern Europe. Tehran signed
comprehensive trade agreements with several of these countries to exchange oil for
foodstuffs, industrial goods, and the technical assistance, equipment, and material to
construct factories in Iran. In addition, Eastern Europe provided military hardware to
Iran. Some of these countries helped Iran evade the sanctions by transshipping Western
spare parts.
Iran also signed a one-year trade agreement with China in November 1979 calling
for a doubling of two-way trade over 1978, to roughly $160 million. In May 1980, the two
countries concluded deal for an unspecified amount of Iranian oil.
The USSR provided little help to Iran despite a new trade agreement. The Soviets
were unable to meet Iran's priority need for food because of the USSR's own agricultural
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problems. Moreover, the USSR could not supply many of the components needed by
Iranian industry which was based largely on Western designs. As a result, Iranian
purchases from the USSR actually declined about $17 million between 1979-80.
Conclusions
The US sanctions on Iran by themselves failed to force the early release of the
hostages or to create substantial problems for the Khomeini regime.
o The economic impact of the sanctions was small because the Iranian
economy was already operating far below normal as a result of the
internal revolution. Moreover, most of the economic pressure that
should have resulted from the US-imposed trade and financial
restrictions was relieved by Iran's ability to circumvent the
sanctions.
o The United States failed to have the full support of its allies and,
hence, full control over the value it attempted to deny Tehran.
o The failure or inability of the United States to substantially reduce
Iran's oil exports gave the regime the financial wherewithal to
overcome whatever trade disruption initially occurred.
o Finally, the United States underestimated the strength of the
revolutionary movement in Iran, Khomeini's ability to organize and
control the populace, and the willingness of Iranians to sacrifice to
the point of martyrdom for what they perceived as a just and
important cause.
Iran's war with Iraq probably had more to do with the hostage release than the
sanctions. Because of the Iraqi invasion in September 1980 Iran desperately needed spare
parts for the military. War damage to oil facilities and the danger to tankers serving
Iranian ports, however, eliminated a key source of finance for these purchases. With
Iran's security threatened, the continuing asset freeze began to have an impact.
The sanctions were probably more successful when viewed as a response to the
need to "do something" quickly about Iran's temerity in seizing the hostages. For both
domestic and international political reasons the United States had to make some show of
force. Other options, such as military actions, were initially dismissed as inappropriate
or unlikely to succeed.
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III
Iran: Trade With The World
(Million US $)
1979
1980
Total Trade
30,305
26,681
Imports
8,578
11,461
OECD
of which:
5,807
7,572
US
1,074
23
Canada
19
27
Japan
921
1,542
Germany
1,285
1,506
France
425
721
Italy
414
575
Non-OPEC LDCs
1,648
2,187
Other OPEC
372
460
USSR
416
399
Eastern Europe*
335
843
Exports
21,727
15,220
OECD
15,204
10,217
Non-OPEC LDCs
5,608
3,673
Other OPEC
127
96
USSR
210
116
Eastern Europe*
578
1,118
a Excludes data for East Germany
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US SANCTIONS ON USSR (AFGHANISTAN) (1980-81)
Background to the Sanctions
In January 1980, following the Soviet military intervention in Afghanistan, the
United States and the major allies announced a sanctions program against the USSR. All
the governments involved issued immediate and, in most cases, strong condemnations of
the Soviet invasion. After consultations, most of the allies initially agreed to back the
US-led partial grain embargo. The United States, in addition, proposed a number of
specific economic denial measures covering the supply of other agricultural products,
various kinds of high-technology goods, and government credits and credit guarantees
(see chart). Finally, the US Government proposed a Western boycott of the 1980 Olympic
Games to be held in Moscow. The sanctions effectively ended with the lifting of the
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? Objectives of the Sanctions
The stated objective of the sanctions was to bring about a withdrawal of Soviet
troops from Afghanistan. None of the parties to the sanctions, however, was willing to
intervene militarily to achieve this result, and most were convinced that nothing short of
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force would work. Thus, the primary objective of these sanctions became the unstated
one of punishing the Soviets for their aggression. Of the economic denial measures
introduced or suggested, three were aimed at hindering Soviet plans for upgrading- --
consumer diets (grain embargo and denial of superphosphoric acid and fishing rights).
Several were designed to hinder Soviet efforts to eliminate bottlenecks interfering with
economic growth (denial of oil and gas equipment, metallurgical equipment,
communications and automotive equipment, and computers as well as the proposed limits
on Western government credits). The Olympic boycott was aimed at embarrassing
Moscow politically, and secondarily at denying the USSR some hard currency.
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PRINCIPAL US-PROPOSED ECONOMIC DENIAL MEASURES AGAINST THE USSR
Agriculture
o Limit the USSR to purchases of the 8 million tons of US-origin grain guaranteed in
each of the 1979/80 and 1980/81 US-USSR Long-Term Agreement years (1 October-
30 September accounting basis).
o Agreement among all the major grain exporters except Argentina not to replace
denied US grain.
o Denial of outstanding contracts for oilseeds, meals, and poultry as of 4 January 1980.
o Ban the sale of processed agricultural products made in foreign countries from US
raw products (for example, soybean meal made from US beans).
o Suspend shipments of 1 million tons a year of US-origin superphosphoric acid to the
USSR.
o Reduce Soviet fishing quotas in US waters from original 1980 figure of 420,000 tons
to 75,000 tons.
Technology
o Assurances that West European and Japanese firms would not be allowed to bid for
projects US firms could not pursue because of the suspension order on export
licenses.
o A US Government review of all outstanding and pending export license applications
for sale of equipment and technology to the USSR.
o Tighter controls on equipment and technology sales to the USSR within COCOM
channels to include:
Consideration of a policy on process know-how to include COCOM review of
any large ($100 million plus) transaction in whieh Western technology
contributes to the development of Soviet industry in a military-relevant
area, even if neither the technology nor the equipment is currently on the
list of COCOM-embargoed items.
Agreement on new review procedures for fiber optics, lasers, and
polycrystalline silicon essential in the manufacture of integrated circuits
(ICs).
- Agreement on strengthening controls on computer and related software
sales.
Other
o A total cutoff of government-supported credits and guarantees subsequently
revised to a request for less concessionary terms on new credits.
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Compliance with the Sanctions
The US-proposed sanctions did not draw strong support from US allies, which made
it clear from the outset that ? for both political and economic reasons ? they wanted to
keep the door to the Soviet market ajar. Moreover, each was mindful not to take a
markedly tougher stand on sanctions than its neighbor. In the case of grain, Argentina, a
major exporter, refused to embargo any sales. The varying degrees of commitment to
the sanctions meant that acceptance of and compliance with the US proprosals also
varied. Most countries put a temporary de facto hold on official export credits, but some
held out longer than others. The national Olympic committees in West Germany, Japan,
and Canada boycotted the Olympic Games; the committees in Britain, France, and Italy
did not boycott, although participation was limited.
In the months immediately following the US introduction of sanctions the debate
over the issues had a divisive effect on the Western affiance. The West Europeans, in
particular, were highly critical of the Carter administration's handling of the matter,
claiming that the United States had no long-term strategy for dealing with the Soviets
and that the United States did not appreciate the West Europeans' position on their
relationship with the USSR and the need to keep channels of communication open. The
debate, however, served to heighten awareness of the need for greater policy
coordination in dealing with the Soviets. A consensus was reached on the need to
strengthen COCOM, for example, even though the parties did not agree on the means. In
addition, the discussion involving the US request for less concessional terms on new
credits to the USSR helped lay the groundwork for the 1982 OECD decision to move the
USSR into a higher rate category for official export credits.
By the spring of 1981 the United States had decided that the domestic political
costs of the partial grain embargo were too high relative to its effect on the USSR. US
farmers?the group most affected by the sanctions?had lost grain and soybean sales to
the USSR worth perhaps $1.3 billion.
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The lifting of the US grain embargo further weakened allied support for other US
sanctions. Western governments acted quickly to protect their commercial interests.
The EC eliminated restrictions on sales of grain to the USSR and planned to resume
subsidies on exports of grain and other agricultural products. The Canadians, who were
taking advantage of the US embargo to pry better terms out of Moscow for grain,
dropped that tactic and rushed to sign a five-year agreement. On the non-agricultural
front, Tokyo began to argue that US lifting of the grain embargo gave Japan a freer hand
in selling high-technology products to the USSR, although within COCOM the "no
exceptions" policy on sales of embargoed technology has not been formally abandoned.
Result of the Sanctions
In the case of the grain embargo, the USSR was able to replace only 9 million tons
of the 17 million tons denied by the United States between January and end-September
1980. Thus, total grain imports for the 1979/80 Long-Term Agreement year (October-
September) were roughly 25 percent below the expected level. In the 1980/81 LTA year,
however, Moscow was able to line up nearly all the grain its ports could handle while
relying on the United States for only 9.5 million tons, or one-fourth of the total as
compared with nearly two-thirds in the year prior to the embargo. The roughly 1.5
milliort tons of soybeans and soybean meal denied by the United States in 1980 LTA year
were fully replaced by Argentina and firms in Western Europe. In fact, EC, Canadian,
and Australian grain exports to the USSR all increased in 1980 compared with 1979.
_
The sanctions resulted in some delay in Moscow's effort to upgrade its domestic
fertilizer industry. The United States is the only large-volume source of superphosphoric
acid (SPA)?a chemical that the Soviet "liquid complex" fertilizer plants purchased from
France were designed specifically to use. The suspension of US SPA sales between early
1980 and mid-1981 delayed the liquid complex fertilizer program by more than a year
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because most of the available phosphoric acid was of a lower grade and unsuitable for use
in the program.
Western sanctions probably did not impair Soviet industrial production
appreciably, in large part because France, West Germany, and Japan did not fully support
restrictions on trade in technology and equipment. While orders by the Soviets for
Western machinery and equipment fell dramatically for a while, new Western contracts
to supoly equipment rebounded in second- half 1980. Nevertheless, the interruption in US
technology sales retarded some urgently needed modernization in the USSR. For
example, Soviet oil and gas exploration schedules were set back by delays in granting
export licenses for such items as drillships and rigs. The revocations of licenses for the
Dresser drill bit plant complicated efforts to improve drilling efficiency. And US denial
of computer parts and assembly line equipment has further hampered an already lagging
Soviet effort to double production capacity for diesel engines at the Kama truck plant.
The impact of these denials, however, is likely to diminish over time as West European
and Japanese firms continue to step in as US replacements.
The boycott of the Olympics deprived Moscow of the prestige and propaganda
opportunities it hoped to extract from well-run, non-controversial games. It had little
effect on Soviet hard currency earnings, however, because most of the receipts from
tourism and broadcast rights had been prepaid.
On the political side, the economic sanctions heightened the debate within the
USSR between advocates of expanding trade with the West and those favoring greater.
autarky. Sanctions served to strengthen the hand of those favoring self-sufficiency who
have long argued that the USSR is dissipating its patrimony by exporting vital raw
materials for Western technology. Thus, the denial measures introduced an element of
uncertainty at a time when Soviet officials were putting the finishing touches on the
1981-85 plan and reinforced doubts within the leadership about the viability of USSR-
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Western trade over the long term. The sanctions have not, however, deterred Moscow
from pursuing its goals in Afghanistan.
Conclusions
The sanctions against the USSR following its intervention in Afghanistan illustrate
the difficulty of implementing economic denial measures on a multilateral basis even
though potential sponsors generally agreed on the objectives, both stated and unstated.
o The United States and others were unable to control supplies of grain
to the Soviet Union because a major grain exporter refused to
participate in the embargo.
o The intensity of the US commitment to the grain embargo was affected
by domestic political considerations.
o Apart from the grain embargo, there was no consensus among the
major sponsors on how to carry out the objectives.
The sanctions did achieve, in some measure, the objective of punishing the Soviets for
their aggression:
o 1980 grain imports were reduced by 8 million tons and restrictions on
sales of superphosphoric acid delayed the liquid complex fertilizer
program thus adversely affecting Soviet plans to upgrade consumer
diets.
o Interruption of US technology sales delayed industrial modernization
efforts.
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? EC SANCTIONS ON ARGENTINA (1982)
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Background to the Sanctions
On April 2, 1982, Argentina militarily occupied the Falkland (Malvinas) Islands.
The following day the UN Security Council adopted Resolution 502, which demanded
immediate cessation of hostilities and withdrawal of Argentine troops and called on
Argentina and the .UnitedKingdom to resolve their differences diplomatically.
The United Kingdom immediately dispatched a fleet toward the islands invoking
the right of self-defense under Article 51 of the UN Charter. On 3 April Prime Minister
Thatcher froze Argentine assets in the United Kingdom. This move was quickly followed
by a ban on trade with Argentina.
In addition to bilateral action the United Kingdom embarked on a comprehensive
worldwide diplomatic campaign to apply maximum pressure on Argentina to withdraw its
troops and resort to a negotiated solution to the territorial dispute over the Falklands.
On 6 April at a meeting of the permanent representatives of the EC 10 in Brussels the
United Kingdom requested a firm show of EC solidarity and implied that it would like to
see a total ban on imports from Argentina. The EC responded to the British request on
16 April by agreeing to a 30-day ban on imports from Argentina. This was the sternest
punitive measure ever taken by the EC, although it was not as comprehensive as the
British had requested.
As the British fleet approached the Falldands and it became clear that the United
Kingdom would not negotiate while Argentine troops remained on the islands, EC
solidarity faded. Ireland publicly stated that it opposed British use of force to regain the
islands. The Italian Government was under strong domestic pressure to lift the sanctions,
primarily because of cultural and ethnic links to Argentina. Other members, such as the
Netherlands and Denmark, were concerned that the sanctions were becoming irrelevant
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to the conflict. They argued that if an invasion were to take place, the sanctions would
have failed to achieve their primary objective of forcing negotiations.
Unable to achieve the unanimity required to renew the Community-mandated
sanctions by 16 May, the EC Foreign Ministers announced action by their separate
governments to maintain economic pressure on Argentina. Ireland and Italy stated they
would avoid "distortions of trade," which meant they intended to resume imports from
Argentina but not for cross-trade purposes. The Danish Government renewed its
sanctions pending parliamentary adoption of national measures for sanctions. The
remaining six member states announced a renewal of the existing sanctions for one week.
A week later, on 24 May, the EC Foreign Ministers met again to discuss the
sanctions issue. This tithe it was announced that the members would extend indefinitely
the separate national measures announced the previous week.
After the fall of Port Stanley, the British wanted to maintain the sanctions until
Argentina formally agreed to end hostilities. However, on 21 June the EC announced
that economic measures would be lifted by the member states the following day. The EC
noted that some of the Ten that had introduced arms embargoes on a national basis would
continue these measures for the time being.
Objectives of the Sanctions
The explicit goal of the sanctions was to pressure Argentina to comply with UN
Security Council resolution 502, which demanded Argentine withdrawal from the
Falldands and resumption of negotiations to settle the dispute. The relative importance
of EC trade to the Argentine economy led many Europeans to conclude that the trade
embargo would exert considerable pressure on the Argentine regime to come to the
negotiating table.
An important unstated motive of the EC sanctions was to demonstrate that the
Community would respond to a clear-cut case of aggression against one of its members.
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Unlike controversial sanction cases such as Poland and Afghanistan, where the
Community was divided on the appropriate form of action, Argentina had attacked an EC
member state. Many EC countries felt that Argentina's sense of international isolation
would be increased by EC solidarity.
Finally, the continental EC countries were conscious of the growing unpopularity
of the EC within the United Kingdom and of the United Kingdom within the EC. EC
agricultural policies and the cost of EC participation were sensitive domestic political
issues for Thatcher's conservative government. Decisive political support from the EC
on the Falklands issue was seen as a possible way to increase the EC political standing in
the United Kingdom while coaxing the Thatcher government to be more compromising on
internal Community issues.
Impact of the Sanctions
The specific sanctions imposed by the EC were far short of the comprehensive
measures taken by the United Kingdom. They applied only to imports from Argentina
and were for a 30-day period. Specifically exempted from the sanctions were contracts
that had already been signed and shipments underway. Given the amount of Argentine
goods subject to long-term contracts and the length of time it takes to ship goods from
Argentina to the EC, most trade was not affected -by the ban.
Only if the 30-day ban had been extended would the measures taken collectively
by the EC have had practical effect. It was clear from the outset, however, that renewal
of the sanctions would be difficult, given the unwritten procedural requirement for
unanimity within the Community and the reluctance of Ireland and Italy to support
continued sanctions. It was the symbolic gesture of the EC decision that was intended to
produce diplomatic and psychological effects.
The EC sanctions were not nearly as effective as the separate actions of
particular states. Both France and West Germany were strong supporters of the British
and quickly moved to impose arms embargoes on Argentina. Other arms suppliers
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including Belgium, the Netherlands, Italy, Sweden, Switzerland, Austria, and Norway also
cut off arms sales. Since Europe was the primary supplier of arms to Argentina, access
to military equipment was almost completely restricted.
EC sanctions were part of the broader context of the diplomatic and economic
pressure being applied against Argentina. In a wide variety of multilateral forums
Argentina found little support for its military action. In the Security Council and the EC
there was explicit condemnation. Argentina was unable to gain Nonaligned Movement
support for its positions in the UNGA, UNCTAD, GATT or even UNESCO. The response
of the OAS was largely rhetorical, and moderate Latin states insisted on watering down
Argentine resolutions so that they would have no legal effect.
Results of the Sanctions
In spite of Argentine vulnerability to economic sanctions the nature of the dispute
between Argentina and the United Kingdom reduced the leverage of economic coercion.
It became clear as the crisis developed that Prime Minister Thatcher had broad
domestic political support to retake the Falklands by force. Within the Conservative
Party she would have faced strong opposition to a negotiated settlement that did not
achieve total Argentine withdrawal without any commitment on the sovereignty issue.
President Galtieri and the military government had little room to negotiate.
National sentiment favored retaking the Falklands. As it became clear that a favorable
diplomatic settlement was unlikely, the leadership decided that it would be better to
surrender on the battlefield after an honorable fight than to surrender at the negotiating
table.
The sanctions combined with other factors, however, may have kept the military
conflict in bounds. Although Argentine leaders decided to fight in the Falklands rather
than negotiate withdrawal, there was also talk of a protracted war against Britain. Had
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Britain stood alone this might have been a more attractive policy alternative; but with
the Argentine economy already weak, little prospect of resupply of military equipment,
and with the threat of renewal of the EC ban on imports this was not a realistic option.
Conclusions
The EC sanctions against Argentina are the classic case of a diplomatic gesture.
At little cost the Community demonstrated solidarity with a member state which had
been the victim of aggression. Had the sanctions been in effect for a lengthy period
their economic impact might have provided incentive to Argentina to remove the troops
and return to the negotiating process. However, the intransigent positions of both the
United Kingdom and Argentina and the British willingness to use force to prompt a rapid
resolution of the crisis meant that economic sanctions had little influence in resolving
the conflict.
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Effectiveness of Sanctions
To judge the effectiveness of economic sanctions we developed a set of "best
case" criteria. Sanctions will accomplish their goals most effectively when:
o The sponsor country has something of value that is critically important
to the target country and can prohibit its acquisition.
o The sponsor can monitor compliance with the sanctions.
o The target has no alternative source of supply or, in the case of a
boycott, no alternate market.
o The country imposing sanctions is strongly committed to them while
the target is not strongly committed to the conduct that triggered
sanctions.
o The economic and political cost of the sanctions is high for the target
and low for the sponsor.
We have found no instances in which such optimal conditions existed when sanctions were
imposed. Nevertheless, the ideal case serves as a benchmark against which to measure
the effectiveness of economic sanctions.
We then compared actual sanctions with the theoretical best case. To do this we:
o Disaggregated the sanctions into seven component parts.
o Determined the relative importance of each component to the
sanctions process, using a scale of zero to 10.
o Determined the prospects for successfully implementing each
component.
o Aggregated the judgments about each component and compared the
result with the ideal case.
The resulting index number, although highly subjective, provides some indication of the
probability of successfully applying sanctions in a particular case. The higher the
number, the more likely sanctions are to be effective. Visually, the more black
appearing in the bars, the more likely the sanctions are to be effective.
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
LEAGUE OF NATIONS SANCTIONS ON ITALY
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS Ou11=10
SPONSOR ABILITY TO MONITOR SANCTIONS (ful10)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fu4fr-8)
ECONOMIC/POUTICAL COST TO SPONSOR 021=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (fuI=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (n21111=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS bagg=10)
ECONOMIC/POLITICAL COST TO TARGET (hlgh=8)
ESTIMATED EFFECTIVENESS
Of PASTICULAN mama
WEIGHT Of FACTO* IN TERMS Of
OVERALL SANCTION trucrivciass
EFFECTIVENESS
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
ARAB BOYCOTT OF ISRAEL
FACTORS S EFFECTIVENESS
SPONSOR CONTROL OF SANCTIONED ITEMS (fulMO)
SPONSOR ABILITY TO MONITOR SANCTIONS (ful10)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulW3)
ECONOMIC/POUTICAL COST TO SPONSOR Ogx=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (M=6)
TARGET ABILITY TO ADJUST TO SANCTIONS 6ioner--10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (pate--10)
ECONOMIC/POLITICAL COST TO TARGET (high--8)
ESTRIATIO EFFECTIVENESS
Of /ARTICULAR FACTOR
WEIGHT OF FACTOR IN TOMS OF
OVERALL SANCTION EFFECTIVENESS
; 1 1 1 1 1 i 1
ITERANIS:uv
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
USSR SANCTIONS ON THE PRC
FACTORS EFFECTIVENESS
SPONSOR CONTROL OF SANCTIONED ITEMS (fuII=10)
SPONSOR ABILITY TO MONITOR SANCTIONS (fulWO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fu11=8)
ECONOMIC/POLJTICAL COST TO SPONSOR 021.=8)RI
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (f41=6)
TARGET ABILITY TO ADJUST TO SANCTIONS 020=10
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (no_tie=10)
ECONOMIC/POLITICAL COST TO TARGET (high=8)
ESTIMATED EFFECTIVENESS
Of PARTICULAR FACTOR
WEIGHT Of FACTOR Di TERMS OF
OVERALL SANCTION EFFE.CTIVENESS
I.
Iii1;;;;;;:
EMCIMIM
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
OAS SANCTIONS ON THE DOMINICAN REPUBIJC
FACTORS EFFECTIVENESS
SPONSOR CONTROL OF SANCTIONED ITEMS (fulMO) .
SPONSOR ABILITY TO MONITOR SANCTIONS (fulMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (1u41=1)
ECONOMIC/POLJTICAL COST TO SPONSOR (low=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (ft41=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (rioneF410)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS Gione=10)
ECONOMIC/POLMCAL COST TO TARGET (hIgh=-8-
ESTIMATED IFFICTIVINTSS
Of PARTICULAR mime
OvERALL SANCTION
WIGHT Or FACTOR IN non OF
11231$ Si $11
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041411
INCIMIES
11211
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FACTORS DETEFIMINING EFFECTIVENESS OF ECONOMC SANCTIONS:
US/OAS SANCTIONS ON CUBA.
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (fluII=10)
SPONSOR ABILITY TO MONITOR SANCTIONS (1uIMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (11.41=8)
ECONOMIC/POLMCAL COST TO SPONSOR tt=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (fu4l=6)
TARGET ABILITY TO ADJUST TO SANCTIONS t(,==10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (mLies10)
ECONOMIC/POLITICAL COST TO TARGET (hIgh=8)
?TDAIID In tCTIVINISS
Of miencuLAR moon
WIGHT Or FACTOR M TIMIS OF
ON/TRAIL SANCTION SFr LCTIVINCSS
EFFECTIVENESS
I II 111111i
11234Si/111
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
UK/UN SANCTIONS ON RHODESIA
FACTORS EFFECTIVENESS
SPONSOR CONTROL OF SANCTIONED ITEMS (full=10)
SPONSOR ABILITY TO MONITOR SANCTIONS (fttIMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulfr-$)
ECONOMIC/POLITICAL COST TO SPONSOR Opy.=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS 00=0
TARGET ABILITY TO ADJUST TO SANCTIONS (ritca_. .1e=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (m.13)
ECONOMIC/POLITICAL COST TO TARGET (hIghx-8-
ISTAIATIO EFFECTIVENESS
Or PARTICULAII EXCI011
WEIGHT OF FACTOR IN TERNS OF
OVERALL SANCTION EFFECTIVENESS
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
FRENCH SANCTIONS ON ALGERIA
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (fuI1=10)
SPONSOR ABIUTY TO MONITOR SANCTIONS (fulMO) -
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulfr-8)
ECONOMIC/POUTICAL COST TO SPONSOR Oow=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (full=6)
TARGET ABIUTY TO ADJUST TO SANCTIONS (none:=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS bons=10)
ECONOMIC/POLITICAL COST TO TARGET (high=8)
1:31111ATID tifECTIVINESS
Of PARTICIAAR ACTON
WEIGHT OF FACTOR IN TERNS Of
OVERALL SANCTION If itzwitlass
EFFECTIVENESS
MI=
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
US SANCTIONS ON PAKISTAN
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (uII=10)
SPONSOR ABIUTY TO MONITOR SANCTIONS (fulMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulWO
ECONOMIC/POUTICAL COST TO SPONSOR Osr_if=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (1u11=0
TARGET ABIUTY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS Giontw10)
ECONOMIC/POUTICAL COST TO TARGET (hIgh=8)
ISTIMATIO EFFECTIVENESS
Of PANTICULAN FACTO*
WEIGHT of FACTOR IN MINS OF
CHIRAL SANCTION ITT ICTIVINISS
EFFECTIVENESS
IIIIIIIIIII
1 1 2 3 4 $ 1 1 1 11
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
US TRADE EMBARGO ON UGANDA
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (fuII=10)
SPONSOR ABILITY TO MONITOR SANCTIONS (full0)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulfr-8)
ECONOMIC/POUTICAL COST TO SPONSOR Oow=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (full=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS Giono=10).
ECONOMIC/POLITICAL COST TO TARGET (hIgh=8)
I3711/ATEO EFFECTIVENESS
Of naticut.A. ACTOR
WEIGHT Of FACTOR P1 TIMMS OF
01111A1.1. RANCl/OH EFFECTIVEHESS
EFFECTIVENESS
I 1 1 1 1 1 1 1 1 1
112313121111
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
US SANCTIONS ON IRAN
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (TLI11=10
SPONSOR ABIUTY TO MONITOR SANCTIONS (fulMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulfr43)
ECONOMIC/POUTICAL COST TO SPONSOR 0ow=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (fill=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (pone=10)
ECONOMIC/POUTICAL COST TO TARGET (hIgh=8)
ILIITIMATEO EFFECTIVENESS
Of PAIMCULAN moon
111111111t1
1
WEIGHT or 'FACTOR IN TERNS or
OA RAU. SANC1ION EFFECTIVENESS
EFFECTIVENESS
is
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
US SANCTIONS ON USSR (AFGHANISTAN)
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (full=10)
SPONSOR ABIUTY TO MONITOR SANCTIONS (fulMO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (11.&8)
ECONOMIC/POUTICAL COST TO SPONSOR (low-43)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (141=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (pones
110)
ECON0m1C/POU1ICAL COST TO TARGET (hIgh=13)
11:STIMATI frItelIVINESS
Of IPARTICUUM IFAC1011
WEIGHT OF FACTOR IN mews OF
OVIRAU. SANCIION If ROWDIES!
EFFECTIVENESS
'is lilt hull
1 1 ! 3 4 3 1 1 1 1
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FACTORS DETERMINING EFFECTIVENESS OF ECONOMIC SANCTIONS:
EC SANCTIONS ON ARGENTINA
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (ftiMO)
SPONSOR ABILITY TO MONITOR SANCTIONS (fulWO)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (fulfr-8)
ECONOMIC/POLITICAL COST TO SPONSOR 0ow=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (1u41=6)
TARGET ABILITY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS (jionw10).
ECONOMIC/POLITICAL COST TO TARGET (1Igh=8)
ESTIMATED EFFECTIVENESS
Of PARTICULAR FACTOR
litIGHT OF FACTOR IN nRus OF
OVERALL SANCTION Eft ECTIVENESS
EFFECTNENESS
11111111111
1113131/111
?
OVERA11
ECM
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Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08501350R000200470001-4
Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08501350R000200470001-4
FACTORS DETERMINING EFFECTIVENESS OF ECONONIIC SANCTIONS:
OAPEC OIL EMBARGO ON US
FACTORS
SPONSOR CONTROL OF SANCTIONED ITEMS (full=10)
SPONSOR ABIUTY TO MONITOR SANCTIONS (ful10)
SPONSOR AUTHORITY TO ENFORCE SANCTIONS (full)
ECONOMIC/POUTICAL COST TO SPONSOR Cow=8)
SPONSOR COMMITMENT TO OBJECTIVE OF SANCTIONS (fu41=6)
TARGET ABILJTY TO ADJUST TO SANCTIONS (none=10)
TARGET COMMITMENT TO ACTION PROVOKING SANCTIONS oomm10)
ECONOMIC/POLITICAL COST TO TARGET (high-43)
LITIMATED EFFICTIVIPFESS
W PARTICULAR fACT011
WrIGHT Of IAC1OR IN Min OF
OVIRAU. SANCTION IfFECTIVINIC311
EFFECTIVENESS
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Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08501350R000200470001-4