Transatlantic Economic Statecraft
June 21, 2016
The CSIS Europe Program and the Center for a New American Security (CNAS) Energy, Economics, and Security Program have released a new report on transatlantic sanctions policy with recommendations for cooperation between the United States and the European Union.
Transatlantic cooperation on sanctions is much better today than it was 20 years ago. In 1982 and in 1996, political disputes over sanctions issues saw European countries legislate to block U.S. attempts to extend restrictions against Russia and Iran to European companies. Overcoming this negative historical experience, both sides of the Atlantic have closely coordinated in recent years to tackle common threats, including nuclear proliferation in Iran and Russia’s military intervention in Ukraine. European sanctions played a central role in bringing Iran’s government to serious negotiations that led to the July 2015 Joint Comprehensive Plan of Action. Despite the recent progress on transatlantic sanctions cooperation, however, the U.S.-EU partnership still faces significant challenges.
Going forward, both the United States and the European Union would benefit from tackling those challenges through cooperation rather than competition.
EU policymakers must make sanctions policy changes in order to facilitate cooperation with the United States. These policy changes may include further harmonization of licensing mechanisms among member states, more flexible tools for sanctions enforcement (and a more aggressive approach to enforcement generally), and further intelligence sharing. In addition, EU mechanisms to support and assist companies struggling to cope with market opportunities lost because of sanctions should be created to increase the political sustainability of the sanctions policy. Lastly, Europeans should tighten their control on transactions between entities under EU sanctions and entities outside of the EU when they occur in euros or other European currencies, such as the pound, in particular when such transactions are forbidden by EU laws.
Expanding constructive cooperation will enable transatlantic partners to preserve the integrity of the sanctions tool and will ultimately benefit the broader political and security partnership. Specifically, it will help to address common challenges: managing policy adaptation to address evolving threats and the circumvention of sanctions; contingency planning regarding the use of sanctions to address emerging security threats; and countersanctions strategies to protect U.S. and EU interests from the use of sanctions by non-Western powers.