Making sanctions work as foreign policy tool

The UK’s new strategy highlights how clarity of purpose, careful calibration and flexibility can help ensure sanctions regimes are effective.

Expert comment Updated 14 May 2024 Published 25 March 2024 3 minute READ

Creon Butler

Director, Global Economy and Finance Programme

The UK has played a key role in the design and deployment of economic and financial sanctions over many years, linked in part to its role as a permanent member of the UN Security Council. 

Russia’s full-scale invasion of Ukraine in February 2022 led to a major escalation in the use of sanctions by G7 countries. While the G7 has been at pains to emphasise that sanctions are part of a broader strategy to support Ukraine in its struggle for survival, they are nonetheless one of the most significant instruments deployed. 

The scale and scope of the measures taken have been unprecedented, including freezing at least $300 billion of foreign exchange reserves of Russia’s central bank, excluding Russian commercial banks from the SWIFT payments system, and steps to cap the price at which Russia is able to export oil so that the product itself reaches the world market, but Russia’s revenues are restricted. 

A new strategy

In the context of this major expansion, and with the repatriation of full authority over sanctions following the UK’s departure from the EU, the UK recently launched a new sanctions strategy under the rubric ‘Deter, Disrupt and Demonstrate’.

The new strategy provides an end-to-end guide to the UK government’s approach. 

It describes the government’s range of objectives and decision-making criteria, sets out the approach to mitigating unintended consequences and legal risks, clarifies roles and responsibilities across government, describes the steps being taken to strengthen enforcement, and highlights the benefits from collaboration with like-minded international partners. 

The document is readable, well-structured, and provides a clear response to the common critiques that sanctions fail to change behaviour, impose unreasonable costs on the implementing country or have serious unintended consequences.

The document… could be a helpful model for clarifying other aspects of the UK’s overarching economic security strategy.

As such, it could be a helpful model for clarifying other aspects of the UK’s overarching economic security strategy, drawing together numerous statements and sectoral strategies in a limited number of pillars. Importantly, the underlying strategy has stood up well so far to scrutiny by the UK courts.

Key challenges

But the new UK strategy also illustrates the key challenges the UK and other western countries face going forward. 

These include the growing range and complexity of sanctions – the UK already has 36 live sanction regimes under the Sanctions and Money Laundering Act of 2018 – and the need to resolve sometimes conflicting objectives, for example, between speed of action and accuracy of targeting. 

They also include making difficult judgments over whether and how to apply secondary sanctions so as to minimise unintended consequences, and the requirement to maintain a common front with close partners while allowing for diverging economic costs and risks between countries. 

Maximising effectiveness

Faced with these challenges, it will be particularly important for the UK and G7 to abide by three principles.

First, when designing or updating a sanctions regime, it is vital to maintain clarity of purpose on what the sanctions being deployed are intended to achieve in the case in question. 

This includes how they complement other non-sanction measures to achieve the overall goal and how any adaptions that may be necessary to deal with changed circumstances or efforts at evasion avoid mission creep. And if the objectives of a sanctions regime do change fundamentally, it is important for the authorities to be explicit about this and the reasons for it.

Despite the growing range of international conflicts, G7 governments should resist reaching for the sanctions instrument as the solution to every possible foreign policy problem.

Second, and despite the growing range of international conflicts, G7 governments should resist reaching for the sanctions instrument as the solution to every possible foreign policy problem.

Instead, sanctions should be deployed selectively and be carefully calibrated in the light of evidence and research as to what is most likely to work with the minimal unintended consequences.

This is particularly true when sanctions are being deployed to re-enforce condemnation of another country’s actions (i.e. ‘demonstrate’), but without the expectation that they will have much effect in terms of disruption or deterrence. Otherwise repeated use of sanctions in these circumstances will only strengthen the narrative that sanctions ‘don’t work’. 

Third, and to support the two principles above, the government and its G7 partners should continue investing in gathering data and undertaking research to ensure maximum understanding on how sanctions work in a particular case, but also how deployment in one case may affect the overall viability of the sanctions instrument. 

This is particularly important in respect of major proposed changes in the way the instrument is deployed, such as the current debate around confiscating the sanctioned assets of Russian state entities. It will also be important when devising new ‘carrot’ measures to incentivise compliance by those targeted by sanctions. 

By following these principles, the UK government and other G7 partners will have the best chance of maintaining public support for, and hence the overall effectiveness of, one of the most important tools of foreign policy.