The EU Sanctions: mechanism and prospects

Until the EU imposed sanctions on Russia in 2014, few Europeans were aware that the Common Foreign and Security Policy (CFSP) entailed the imposition of sanctions. Member States had been enacting sanctions jointly since the early 1980s; in the initial decades, European measures had modest economic consequences, but it has changed.

The increasing centrality of EU sanctions in the CFSP raises a number of questions: in which situations are sanctions applied, and with what outcome? What sanctions are best tailored to address different kinds of situations? What are the implications of the EU’s increased use of sanctions? These questions are particularly pressing for two reasons. Firstly, while the EU is not new to the sanctions field, it still has limited experience in imposing and managing restrictions of a financial and economic nature outside the aegis of the United Nations (UN). Secondly, most sanctions scholarship focuses on the sanctions practice of the United States and the UN, both of which differ from that of the EU in important ways.

EU Sanctions Policy: An Overview

‘The Basic Principles on the Use of Restrictive Measures (Sanctions)’, a programmatic document adopted in 2004, announced the Council of the European Union’s intention to enact autonomous sanctions to uphold respect for human rights, democracy, the rule of law and good governance, and to fight terrorism and the proliferation of weapons of mass destruction (WMD). While the term ‘autonomous’ is understood here to signify those restrictions agreed by the EU in the absence of a UN Security Council (UNSC) mandate. It is necessary, because the UN sanctions mechanism is not universal, e.g. the UN lacks a mandate to address situations of democratic regression, such as coups d’état.

Design and Sequencing

Although no official document spells out escalation strategies, a standard sequencing can be discerned from EU practice. The beginning of the actual imposition of sanctions is sometimes preceded by the passing of the legislation enacting sanctions – a so-called ‘sanctions framework’ – with an empty annex, indicating that the Council is ready to include entries but that it will initially refrain from doing so, in the expectation that the crisis can be resolved and make designations unnecessary. This practice, common in the UN context, equates to a threat of sanctions imposition as it gives the target one last chance to desist from the behavior condemned before sanctions are enacted. If this fails, a first round of designations materializes.

The first stage in the actual sanctions exercise consists of the blacklisting of a number of individuals on which a visa ban and an asset freeze is applied, often accompanied by a few companies and agencies. The number of designations increases progressively in subsequent waves. A second stage includes an embargo on the supply of arms, equipment for internal repression and surveillance and dual-use items, in addition to a ban on the provision of related services and of any form of military cooperation. The next stage in the escalation prohibits the export or import of certain products and commodities, and encompasses the imposition of financial sanctions. This may take the form of trade bans or the blacklisting of state companies dealing with energy and commerce, key public entities like the central bank, and even commercial harbors.

While the EU traditionally exercises caution in moving from the second to the third stage, it has crossed this threshold with increased frequency over the past decade Different targets are hit in each phase: the first stage narrowly focuses on key political figures, the second is geared towards the internal security establishment, and the third concerns state and business elites while entailing broader ramifications for society. Anyway the most recent experience of imposition of sanctions on Russia is exceptional due to its deviation from the general pattern described above. And this precedent lets the experts think that the mechanism is evolving.

Can Sanctions Do Better?

Although the rationale behind sanctions appears logical, their application is generally considered unsuccessful. While scholarship offers plentiful explanations for the perceived failure of sanctions, some of these derive from flaws in their design and management and appear particularly relevant for CFSP practice.

Firstly, there is often a mismatch between the situations in the context of which sanctions are applied and the type, scope and timing of the measures selected. The CFSP sanctions formulation and sequencing follows a similar template when applied to situations of violent conflict or democratic backsliding. However, as seen above, different situations require different measures and targeting policies. More thought could be given to the tailoring of the packages depending on whose incentives need to be altered to promote compliance. Improving the alignment between the measures to be adopted and the context in which they need to display their effects necessitates better planning. This requires, in turn, enhancing foresight capacities to conduct an analysis. 

Secondly, despite evidence that the threat of sanctions tends to be more successful than their imposition, sanctions threats are rarely issued publicly. Moreover, numerous blacklisted individuals report having learned about their designation from the news, suggesting that they had not been approached to negotiate an accommodation before sanctions were enacted.

Thirdly, the goals of sanctions suffer from a certain indeterminacy. The absence of explicit goals in sanctions-enacting legislation allows the Council ample discretion in settling the controversy with the target. However, that very discretion can discourage targets from complying as they lack an indication of the circumstances under which sanctions would be removed, a situation which may foster the belief that sanctions will persist irrespective of their behavior. In reality, the opposite is true: the EU displays a higher propensity to lift sanctions than other senders. Washington, and in particular the US Congress, is reluctant to lift sanctions before full compliance is in place for fear that targets will cease to comply in the absence of pressure. By contrast, the EU has repeatedly demonstrated its readiness to terminate sanctions in the face of visible progress made by target leaderships short of full compliance, reinstating trade and aid likely to facilitate further progress.

Lessons for and from The Sanctions On Russia

The current sanctions regime against Russia remains an exception in the CFSP record. It was applied in an atypical scenario: that of an international aggression rather than of the customary intra-state conflict or democratic backsliding. Accordingly, an unprecedented level of sanctions cooperation was achieved among a group of mostly Western allies encompassing G7 members – the EU, the United Kingdom, the United States, Canada, Japan – as well as Australia and South Korea. This collection of ‘like-minded’ countries sees itself as substituting the action that the UNSC is prevented from taking due to the Russian veto.

The analysis of sanctions application presented here does not augur well for the success of the current package in halting military advances. The pace at which sanctions display their effects make them unsuitable to constrain military force, although – paradoxically – this is the type of breach that attracts the most decisive action by the EU. Indeed, sanctions have been usefully employed to reduce lethality and facilitate an end to conflicts characterized by protracted military stalemate. Nevertheless, the current sanctions response is significantly boosting the EU’s agility and efficiency in terms of sanctions preparation and implementation and extra-European coordination.

Source: EUISS

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