Chinese, Russian, And Iranian Roles In Ending the Era Of Sanctions – OpEd


The excessive and unilateral use of economic sanctions by the United States has not only led to disruptions in international relations and global supply chains but has also exposed the human rights consequences of applying these sanctions and has reduced the willingness to use them among the allies of the United States and especially, the members of NATO.

The reduction in the effectiveness of sanctions, which was also evident in the two cases of Iran and Russia, has made the Western partners of the United States (the perpetrators of the sanctions) more vulnerable to those who are called enemies or competitors of Washington.  The ongoing bloodshed between Europe and Russia, which will take time to heal, is a glaring illustration of this vulnerability.

By 2021, nearly 16,000 people and entities have been the target of sanctions by the United States and its European allies, but the lack of coherence of the West in the continuation of the sanctions strategy has caused the United States to not be able to achieve international consensus (in order to apply multilateral sanctions) even in the case of Russia. In this regard, many countries of the so-called “Global South” and even countries such as India and Turkey, which are Western allies and NATO members, have not joined the campaign of maximum pressure against Moscow.

In response to the sanctions, the countries targeted by Washington’s sanctions have not sat idle and are strengthening their economies against unilateral sanctions and taking preventive measures. They have also managed to circumvent the US sanctions in a number of ways with the assistance of other nations of the world.

Bilateral Currency Swaps are one of the ways to neutralize the sanctions. The countries targeted by the United States sanctions have succeeded in bypassing the United States sanctions by establishing direct links between their central banks and third countries and using national currencies instead of the US dollar. China, for instance, trades with more than 60 nations, including Argentina, Pakistan, Russia, South Korea, Turkey, and the United Arab Emirates. Even India used rupees and rubles in the deal to buy the S400 system from Russia. 

Another way to circumvent sanctions is to develop non-western payment systems. While SWIFT is still the dominant international payment system, other countries, especially China, have launched their own payment system called “CIPS” and currently, nearly 1300 banks in 100 countries are connected to it. Regarding this, the Chinese government mandates the “CIPS” system to be utilized by businesses wishing to access the domestic market. The growing use of digital currencies and blockchain-based payment systems, which are outside the regulatory purview of the United States and its European allies, is another method of getting around sanctions.

Other factors contributing to the increasing ineffectiveness of sanctions include the target countries’ national economies’ growing resistance to sanctions and their adoption of preventive measures, the internationalization of global supply chains, and the rise of multinational corporations operating internationally.

In actuality, the sanctions, which for a considerable period of time served as a cold political and economic weapon to serve the interests of the United States, failed to stop the deadly military interventions in the wars in Iraq and Afghanistan and the Russian attack on Ukraine, and eventually cost the United States $5 billion. The swamp of Iraq and the flight of American military forces from Afghanistan showed that the losses of sanctions leading to war for America with more than 5 thousand billion dollars in material damage and about 10 thousand human casualties were much more than the countries targeted by sanctions.

China’s domination of global markets and the strengthening of the yuan in economic relations have minimized the impact of sanctions, and now the imposition of sanctions has turned into mutual damages for those who impose sanctions. The obsessive use of sanctions by the United States, regardless of its damage to the interests of its allies, and the unwillingness of the allies to continue with the sanctions, indicates the gradual revelation of the economic damage caused by the imposition of sanctions for the sanctioning countries. It has also created a deep gap in transatlantic relations, which would have made the entire relationship between Europe and America vulnerable if the war in Ukraine had not happened.

Washington has now been forced to alter its approach to sanctions in favor of strict export control laws and to apply sanctions through unilateral frameworks rather than multilateral and global ones as a result of the sanctions’ growing ineffectiveness. America has also targeted the target nations’ technology industries with its sanctions because it is well aware that a nation’s capacity for technological advancement will determine how its power is distributed in the future. This new American strategy is no less challenging and has faced resistance from the allies of the United States and especially Washington’s European allies.

Regarding the application of sanctions through unilateral frameworks, the strategy of the United States is to bring together fewer countries with sufficient international weight in applying sanctions (by creating or fueling the security concerns of these countries) with his new sanctions policy. This is clearly the pattern that the United States has used with Iran in recent years, and by fueling the security concerns of Iran’s regional rivals, it has associated them with its policy of containment, a pattern that is now on a broader level and with Cooperation between Japan, New Zealand, South Korea, and Australia is underway against China.

European and Japanese companies, however, do not have a good memory of the United States export control strategy and remember how Washington, which was concerned about the independence and expansion of the influence of these companies in international markets, tried to impose its export control policies on them and in this way, caused economic damages to these companies and stopped their growth process. This is exactly the kind of pressure the Biden administration is putting on Dutch and Japanese companies to ban them from working with China’s technology sector. But this time, things are a little different, and European governments must consider these export control policies in light of their national interests because they are under tremendous economic pressure as a result of the imposition of sanctions against Russia. In fact, these governments and businesses need to be persuaded that the cost of defying US export control policy toward China is higher than the economic cost of doing so. 

Timothy Hopper

Timothy Hopper is an international relations graduate of American University.

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