Biden Admin Likely to Continue Use of Secondary Sanctions, Think Tank Says
Although it prefers multilateralism, the Biden administration will likely continue to use secondary sanctions when coordination with allies isn’t possible, the Center for a New American Security said Aug. 26. But the think tank said the strategy may present challenges, especially with the rise of new blocking statutes designed to counteract the effects of extraterritorial sanctions. While the European Union’s blocking statute “has not been effective” because of enforcement and implementation issues (see 2108020030), CNAS pointed to China’s recently introduced blocking regulations, which could present compliance challenges for multinational companies (see 2107080057 and 2108040031). Russia has also drafted its own rules to penalize firms that comply with U.S. sanctions, although they haven't been enacted, CNAS said.
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“Although these blocking statutes warrant further consideration on proper implementation and enforcement policies for U.S. secondary sanctions, the effectiveness of secondary sanctions will continue to depend on the strength and attractiveness of the U.S. economy,” CNAS said. “As long as the United States remains a leading economic power and epicenter of the global financial system, secondary sanctions will remain a potent tool in U.S. economic statecraft.”