In the April edition of the Global Sanctions Dashboard, the GeoEconomics Center covered the dynamics of UN sanctions, the UK’s new anti-corruption authority, and the Kremlin’s use of sanctions as a law enforcement mechanism. In this month’s analysis, we look at China’s new anti-foreign sanctions bill and turn to Belarus after the KGB’s kidnapping of Nexta journalist Roman Protasevich and his girlfriend Sofia Sapega. How does Belarus itself use sanctions? The Dashboard also tracks the uncertain path of anti-kleptocracy measures and what it means to create a sanctions authority and not use it. Plus, we have more countries on the sanctions map—enter Southeast Asia.
Our dashboard has now grown to include sanctions data from Indonesia, Malaysia, Singapore, and Vietnam. Similar to Russia, as we discussed last month, these lists primarily support law enforcement and counterterrorism operations. Vietnam, in particular, has relied on sanctions to target political opponents based in both the United States and Canada. Earlier this year, Vietnam designated several members of the Canada-based exile group “Viet Dynasty,” an organization Hanoi alleges plotted and financed acts of terrorism against the Vietnamese government. These sanctions followed designations made in 2018 against the California-based “Provisional National Government of Vietnam” over similar allegations. Indonesia, Malaysia, and Singapore also operate sanctions lists that target individuals and entities suspected of facilitating or engaging in acts of terrorism. These lists further highlight the difference between regimes that rely on sanctions for domestic security and those who use sanctions as both a foreign policy and law enforcement tool.
As the Dashboard expands, we’re getting an ever clearer picture of how the world views and implements legal authorities in very different ways. What does it mean to do sanctions “correctly”? If you’d like to dive deeper into whether sanctions can violate human rights based on how they are designed and implemented, check out Castellum.AI’s research and unique methodology. And watch us discuss it too!
Designations and Delistings by Sanctions List Source
Click on a listing authority to begin our interactive data visualization. Inside circle is the List Source. Outside circle is the list (also called program or regime, and generally indicative of the reason for designation). Hovering over a name on the outside circle will show you a sanctions breakdown. Numbers reflect primary sanctions lists only. Data collected from May 1st 2021 – June 21st 2021
China’s Anti-Foreign Sanctions Law
In the Dashboard’s March edition, we began discussing how the Chinese government is building a legal framework for defensive economic statecraft. Last week, the PRC announced the passage of its new anti-foreign sanctions law, which aims to counter US and EU sanctions against China and its state-owned enterprises. Under Article 12, the law stipulates that it is now illegal to comply with foreign sanctions in China, and if found doing so, the respective individual or entity may be subject to similar restrictive measures. The broader, most consequential, aspect of this law is the legal authority Beijing now has to sanction anyone it deems appropriate. Prior to Beijing’s countermeasures in March over Xinjiang, the Chinese government had mostly wielded sanctions to handle Hong Kong and Taiwan as a matter of internal security.
While it remains unclear how Beijing will enforce this new law, the timing is hardly coincidental. Just a week prior, the Biden administration issued an Executive Order (EO) amending EO 13959, which prohibited US investments in companies associated with China’s military-industrial complex. Under the amended EO, the Biden administration expanded the scope of companies subject to this designation, and announced that it will list 59 Chinese entities on its new Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List), taking effect on August 2, 2021. After much uproar over the March countermeasures, the European Parliament also voted to freeze its investment deal with China.
Through a series of legislation, Beijing has prepared to hit back at Western companies and governments for criticizing matters related to China’s “internal affairs,” but we don’t know the difference yet between saber rattling and credible threat. Last year, China unveiled its ‘unreliable entities list,’ a mirroring of US Commerce Department authorities, but has yet to use it. Whether the anti-foreign sanctions law will be another signaling mechanism or a new offensive capability for Beijing’s sanctions toolkit remains to be seen. The move has certainly rattled nerves among foreign investors and financial institutions, but Beijing must be careful not to overstep. Financial markets remain overwhelmingly weighted in favor of the US dollar.
Empty Lists, Empty Promises?
China has yet to test the authorities it recently granted itself, but it’s not the only country to put a toe in the water and signal a foreign policy shift before doing anything with it. After much internal wrangling, the EU agreed on a human rights sanctions regime late last year but took several months to add names. The US cyber authority still remains largely unused, and the Biden administration’s new sweeping executive order on Russia serves as a statement of resolve more than a legal authority to designate; indeed, the latter existed in multitudes beforehand. The risk, for the US, EU, or China, is that a statement of resolve becomes a non-credible threat.
Following the hijacking of the Ryanair flight by Belarusian KGB agents, Western governments vowed that such behavior will not go unpunished, and indeed the EU, US, UK, and Canada delivered on that promise and imposed a fresh round of coordinated sanctions. These measures targeted key sectors of the Belarusian economy, including potash fertilizer exports, the tobacco industry, petroleum, and petrochemical products, reimposing many of the restrictions the EU had lifted in 2016, and the US had licensed. Most notably, the EU designated Russian oligarch Mikhail Gutseriyev, the largest single foreign investor in Belarus. Seven non-EU countries also followed suit in banning Belarusian carriers from flying in EU airspaces and from accessing EU airports, and it is likely that an expanded US Belarus authority will follow, paving the way for wider sectoral measures out of Washington. But for all the talk over sanctions against Belarus, we thought it would be worthwhile to take a look at how Belarus itself uses sanctions.
Prior to the hijacking and kidnapping on May 23rd, the Belarusian State Security Committee (KGB) sanctioned Roman Protasevich under Part 1 of Article 293 of the Belarusian Criminal Code for his role in the ‘organization of mass riots.’ Stepan Putilo, fellow Nexta journalist and friend of Protasevich, is the only other individual sanctioned under the same criminal code. Both journalists were designated for their coverage of the protests following the fraudulent presidential election in Belarus last summer. Sofia Sapega, Protasevich’s girlfriend who was also kidnapped during the hijacking, is notably absent from the KGB’s sanctions list and is likely being detained to apply additional pressure on Protasevich.
In Belarus, sanctions are run by the KGB and primarily focus on designations administered by the United Nations. However, as the Lukashenko regime continues its crackdown on opposition groups, the KGB has begun using sanctions to target pro-democratic forces both in exile and across the country.
The main legal authority the KGB uses for these designations falls under Criminal Code 289, which is applied to those charged with committing acts of terrorism. In Belarus, these individuals, including peaceful protestors and pro-democracy activists, now face extensive prison terms, life sentences, and even the death penalty. Sviatlana Tsikhanouskaya, who ran against Lukashenko last year and now lives in exile in Vilnius, remains sanctioned under this list. Other notable names are opposition activists Igor Makar and Mikalay Autukhovich. Perhaps most disturbingly, Lukashenko recently signed into law several amendments to Belarus’ Criminal Code that could codify draconian moves against peaceful protestors and activists. The KGB has sanctioned dozens of political dissidents under the guise of ‘terrorism.’ As Western governments tighten their grip on Minsk, it’s important to contrast very different concepts of civil unrest, both targeted by sanctions.
Since last month, when the Dashboard unpacked Russia’s use of sanctions for similar purposes, Moscow designated Aleksei Navalny’s political movement as an extremist organization, putting it on the same list with that of ISIS and Al-Qaeda. Under this designation, it is now illegal for Russian nationals to associate with Navalny’s Anti-Corruption Foundation (FBK), in addition to the FBK no longer being allowed to organize or fundraise throughout Russia.
Building An Anti-Kleptocracy Playbook
The US administration published an executive order in early June outlining its intentions to tackle corruption as a US national security priority both domestically and overseas. Meanwhile, Congress unveiled the Counter-Kleptocracy Caucus, a bipartisan group designed to help combat authoritarian governance and global corrupt practices. Building off of this momentum, the White House also announced that the G7 nations will pursue coordinated approach to combating global corruption, with a focus on “tackling the misuse of shell companies, limiting the ability of bad actors to launder dirty money in real estate purchases, improving corruption-related information sharing, and reforming foreign assistance to focus on anticorruption as a cross-cutting priority.”
But what does that mean for sanctions? The United States recently designated three Bulgarian nationals and their networks across Bulgaria for serious corrupt practices, encompassing 64 entities. The measure was received well by Bulgarian authorities and exemplifies the stellar forensic work of the government, but why are Bulgarian fraudsters now a priority national security concern for the United States? Global Magnitsky grants the US authority to sanction corrupt actors anywhere in the world, but it remains unclear how targets are prioritized.
As the international community reshapes its approach to corruption as a global security threat, we can expect more coordinated multilateral sanctions around this issue. But while the Biden administration appears resolute, anti-kleptocracy initiatives may soon conflict with the administration’s less-defined policy towards Russian malign behavior. During the past month, the United States decided to waive sanctions on Nord Stream 2 AG, its CEO Matthias Warnig, and Nord Stream 2 AG’s corporate officers. Targets on the margins of foreign policy prime time may see tougher treatment than controversial ones, particularly those involving close US partners (Germany) or geopolitical challengers (Russia).
On the Radar
Will the US respond to Moscow’s repeated cyber operations against the United States? In addition to the Colonial pipeline attack, the United States Agency for International Development (USAID) announced that it had been a victim of a cyberattack carried out by Russian intelligence services. Both attacks could prompt sanctions deliberations, as the US president has warned, but cyber attribution isn’t always airtight, and repeated sanctions on the same offending party could become a game of diminishing returns.
Meanwhile, last week, Ukraine shot back at Moscow with sanctions on over a thousand individuals, entities, and state institutions, its largest such move since 2014. Watch for a further escalatory row between the two, with Russia testing Ukraine’s economic resilience and ability to obtain further assurances from G7 countries and the EU, but with little international market impact. It was undoubtedly a bold move on Ukraine’s part and mounts pressure on the US, UK, EU, and Canada to follow suit.
On June 8, President Biden signed an Executive Order that modernizes a decades-old authority to target actors who challenge the stability and security of the Western Balkans after long government debates whether the old document was still fit for purpose. This applies to the Dayton Accords and also the 2018 Prespa Agreement that resolved tensions between Greece and Northern Macedonia, and helped bring the latter into NATO.
The U.S Innovation and Competition Act of 2021 includes authority to impose sanctions on those responsible for the ongoing human rights abuses and forced labor practices in and around Xinjiang. The law calls on the administration to impose sanctions against relevant individuals and entities involved in the ongoing genocide of the Uyghur people in Xinjiang, as well as Chinese entities currently engaged in cyber operations against the United States. The fusion between domestic economic renewal and competition with China appears complete.
As the conflict in Tigray continues, Congress continues to build the case that the Biden administration should impose sanctions against Eritrean officials and call for the immediate withdrawal of all Eritrean troops from Ethiopia.
The Global Sanctions Dashboard provides a global overview of various sanctions regimes and lists. Each month you will find an update on the most recent listings and delistings and insights into the motivations behind them.
At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.
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