top of page

The Cyclic Relationship Between National Security & Economic Sanctions: Does the International

Enacted with the goal of altering a specific action or type of behavior, economic sanctions are used for a multitude of purposes. Notably, national security is one of the most frequently cited. Sanctions are imposed to affect the target country’s economy and induce both domestic and international investors to be more risk-averse, thereby hampering investment. While regarded as a preeminent tool for countering and deterring threats, the reality of economic sanctions may not be as advantageous as predicted and may result in the creation of even more national security threats when imposed inappropriately. Accordingly, the President’s authorization to enact economic sanctions may not take into full consideration the actuality of the impact of economic sanctions on reducing national security threats.

The power to impose economic sanctions upon foreign countries is rooted under the International Emergency Economic Powers Act (IEEPA), which grants the President the authority and ability to announce a national emergency during peacetime and “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.” This Act empowers the President with the power to halt, investigate, and impose trade limitations against any foreign country regarded as a threat to the national security of the United States. Gradually, the Act’s coverage of national security threats expanded to cover drug dealers and chemical or nuclear technology traffickers. Following the attacks of September 11, 2001, Executive Order 13224 and Article III of the USA PATRIOT Act broadened the President’s power to impose sanctions and enforced financial entities to increase their standards and responsibility to report any suspicious transactions.[4] These legal initiatives reintroduced 1999 United Nations Security Council Resolution 1267, condemning terrorist safe havens through sanctions, and the creation of the Financial Action Task Force, a G-7 committee charged with the task of stalling terrorist financing.

There is no one-size-fits-all sanction rule for uniform success and, accordingly, there are both pros and cons that come with sanctions. This form of restriction tends to be popular because it is perceived to offer a seemingly proportional response to a conflict or threat without immediately utilizing military force. Likewise, sanctions take on a symbolic representation, as their enforcement expresses global displeasure with a certain action or behavior of the sanctioned country.

Of course, significant restrictions on the continuance of a target country’s economic will result in potent results. While sanctions may be beneficial in this light, the coercive consequences have historically outweighed the supposed benefits. Targeted countries experience increased levels of political risk, decreased investment in their economy, exceedingly higher levels of corruption, and greater levels of mismanaged governance.

Notably, corruption as a consequence of an economic sanction creates the perfect porous environment for criminality. Terrorist organizations are drawn to corruption-ridden countries in efforts to channel their finances. When combatting this influx, countries struggle to properly strengthen their resources and prevent the further infiltration of terrorist organizations. For instance, the OECD identified four connections between corruption and terrorism: “(1) corruption and poor governance hamper countries’ ability to fight terrorism; (2) corruption facilitates international terror attacks; (3) corruption helps cross-border terrorist financing; [and] (4) corruption and terrorist financing share methods to hide money.”

Accordingly, fueled terrorist ideologies in impacted areas unable to cease the criminal activity increase both international and national security threats. The cyclic nature of this problem, however, seems not to be covered by the IEEPA, and the reason the sanctions were imposed on a particular target country has only increased.

bottom of page