The author is global head of sanctions, compliance and risk at ACAMS
The Covid-19 crisis has seen unprecedented demand for humanitarian and medical support around the world, with a particularly desperate need in fragile, conflict-ridden jurisdictions currently subject to sanctions. Socio-economic exclusion, poor infrastructure and large numbers of displaced persons living in overcrowded camps increase the complexity of delivering much-needed services. In places like Syria, Yemen, Venezuela and Myanmar, this is one of the unintended consequences of sanctions compliance.
With a new president in the White House, the United States has a unique opportunity to review sanctions policy and alleviate some of the challenges at hand. It’s an opportunity that we should not squander.
Sanctions are not designed to interrupt the export of medicines, foodstuffs or other critical services. Even where sanctions frameworks are broad, a wide number of exceptions exist to allow for the movement of humanitarian goods and services.
Yet a problem persists because the framework for implementing sanctions exceptions and licences are so technical even experts struggle to decipher them. Frequently, what is and isn’t permitted without requiring prior authorisation varies across the countries imposing sanctions and across the different regimes where they are applied. Often banks, exporters and humanitarian actors need to consult multiple sets of legislation. Even determining what constitutes “humanitarian” can be open to interpretation.
We currently face multiple humanitarian emergencies across environments under sanctions ranging from Venezuela to Iran and North Korea. Lifting sanctions in these jurisdictions is unlikely to happen any time soon; the human rights of local populations could be further endangered, and it would have a detrimental impact on global security. As such, the debate needs to focus on addressing the obstacles that impede the effective use of humanitarian exemptions.
First, a more defined and consistent position on what is permitted must be taken by all agencies — the UN, the US, the EU, UK and others. Licensing must support the rapid movement of medical and humanitarian equipment. Currently the system is too convoluted.
Second, there should be much greater clarity on allowable activity so that humanitarian actors, NGOs and others can implement the full range of required support services. This includes addressing the thorny issue of permissible engagement with designated actors within a jurisdiction under sanctions, or access to key infrastructure resources including phone networks and purchasing of fuel.
Governments imposing sanctions should also look at areas where co-operation can occur. Practical action could include preparing a streamlined list of medicines, pharmaceutical products and essential medical and humanitarian equipment that can be quickly deployed to environments under sanctions.
And finally, an absolute must is ensuring the availability of viable payment channels. Governments cannot expect to impose sanctions on large swaths of a country’s financial systems without it having major consequences for legitimate transactions. For settings such as Iran, Syria and North Korea, there could be greater utilisation of special purpose vehicles which are dedicated to supporting humanitarian transactions.
The policy reviews that come with any new administration in the White House offer an opportunity to advance necessary changes. Addressing the humanitarian consequences of sanctions supports wider security objectives, including those currently on the table with Iran. No matter where you sit in the sanctions effectiveness debate, it is clear that the pandemic has made the delivery of humanitarian relief even harder. Now, more than ever, it is time for action.