As the United States has intensified its use of sanctions and economic tools for foreign policy over the last 25 years, it has naturally developed bureaucratic structures to manage these tools. Along with these structures have come the routine challenges of staffing, organizational culture, and internal politics both within the agencies involved and among them in the interagency processes. This article offers an assessment of how the U.S. Department of State has adapted to the growth of sanctions use by taking on more functional responsibilities and the impact this has had on foreign policy more generally.
State has long been in the international sanctions game, serving as the lead foreign policy agency for the U.S. government. However, over the last decade, State has forfeited some measure of its responsibility for statecraft and foreign policy development in an effort to become more operational. This has been detrimental to the Department and the broader U.S. government.
In 2012, State faced a bureaucratic challenge: how to assert itself in the then-expanding world of economic sanctions. With Treasury often described as responsible for sanctions policy and enforcement, there was pressure within the Department to recapture some of its economic statecraft influence. Then-Secretary of State Clinton responded by creating the first Coordinator for Sanctions Policy and empowering officers throughout the Department to be on the front lines of economic security. While this approach made sense at the time, it came at a cost in the strategic clarity and foreign policy vision that the Department ought to bring to the table.
Although this approach made sense initially, State's concentration on operational involvement in sanctions came at a cost. One fundamental gap and three specific issues have arisen or been called into sharp relief in the intervening decade.
First: State has lost some of the space and independence to think about why sanctions ought to be imposed and under which circumstances they should be adjusted or even removed. The creation of authorities and capacities feeds a need to utilize them. Every decision to expand State's own operational sanctions efforts came along with a management responsibility for budget and performance appraisals; a natural result was pressure on sanctions offices to look for targets to hit and to broaden the reach of their efforts.
Second: State's operational role has created arguments over authorities, confusion in terms and interpretations, and duplication of intelligence analysis that wastes time and government resources. When functioning well, State and Treasury often have to engage in frequent "de-confliction" meetings to sort out who is targeting whom and with what authorities.
Third: External actors do not know who to go to for advice on sanctions actions, exceptions, waivers, and rules. By keeping operational sanctions decisions spread among agencies, the U.S. government makes it harder for any outside person to understand whether and how exceptions could be made, the terms for sanctions removal or modification, and similar operational questions.
The current system can be changed; indeed, if sanctions continue to play the role they have assumed in foreign policy, it must. We propose three recommendations:
First Recommendation: State should cede to Treasury all responsibility for the operational elements of sanctions designation and delisting of individuals or entities regardless of which sanctions authorities would be utilized. This is not to say that the personnel at State doing this work have done poorly; by virtue of doing well, the overall situation has gotten muddier when clarity is what is needed.
Second Recommendation: In exchange, State should be granted greater authority to identify the countries, issues, and purposes for which sanctions use should be prioritized and/or eased, and what types of sanctions would be most impactful. State's role as the foreign policy lead should afford it the ability to decide in which circumstances sanctions tools ought to be emphasized as helpful or necessary to advance foreign policy goals and which they would not.
Third Recommendation: The White House should ensure that everyone is playing by the rules, that sanctions priorities fit the broader foreign policy of the president, and that sanctions authorities are being appropriately utilized. The White House can execute this function through its processes, including meetings led by NSC staff, and adjudicate disagreements as it historically has.
Although idealized and perhaps oversimplified, this set-up would have significant advantages. First, it is clean. State identifies the right places for sanctions and policy objectives those actions would advance and passes that information along to Treasury. Agencies would be aware of those decisions and actions before they are imposed—with appropriate opportunity for last minute decisions to pause if circumstances have changed—but otherwise, everyone would understand their role and responsibility.
Second, it codifies some elements of the current system. State is already consulted on licensing and, on occasion, other decisions for its foreign policy guidance; Treasury is already part of the discussion when sanctions are being contemplated.
Third, it will give State space to think. If State's roles were to be clarified as proposed, the Office of the Sanctions Coordinator would have a clear set of mandates to set priorities for sanctions action in collaboration with the other offices of the Department and to get those priorities approved by the Secretary of State. State can also utilize its time and staff during the year to conduct deeper assessments of sanctions, their strategies, and their role in international issues. State can focus on integrating sanctions into its broader foreign policy framework and to game out how sanctions tools might be applied in the year ahead.
Sanctions policy is here to stay as a defining element of the 21st century exercise of American power; getting the strategy, policy, and organization of the endeavor right is essential to make sanctions as meaningful, well-resourced and proportional as possible. The reforms proposed above would not solve every problem in U.S. government sanctions policy, but they would provide a framework in which better strategy, clearer policy, and more effective operations could flourish. If the U.S. government is to make the most of the sanctions tool, State and Treasury must operate from complementary roles, with State focused on answering the question "what do we want to achieve?" and Treasury focused on answering "how do we achieve it?" The current system conflates these questions, to the detriment of both.