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91. Europe and Iran: The Economic and Commercial Dimensions of a Strained Relationship

Author:
Cornelius Adebahr
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Europe and Iran had begun to invest in a closer commercial relationship just when the United States withdrew from the nuclear deal in May 2018. Since then, Washington has re-imposed its stringent economic sanctions, targeting Iran’s oil exports as a major source of government revenue but also banning financial transactions with the country. This poses an enormous challenge for the EU, which had intended to use the 2015 agreement as a stepping stone to promote regional cooperation and, ultimately, a more comprehensive relationship with Iran. Paper produced in the framework of the IAI-FEPS project entitled “Europe and Iran in a fast-changing Middle East: Confidence-building measures, security dialogue and regional cooperation”, December 2018.
Topic:
Foreign Policy, International Trade and Finance, Bilateral Relations, Sanctions, and Transatlantic Relations
Political Geography:
Europe, Iran, Middle East, North America, United States of America, and European Union

92. Consensus for Action: Towards a More Effective EU Sanctions Policy

Author:
Tom Keatinge and Emil Dall
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Sanctions are a key tool of foreign policy but have taken on greater salience over the last 20 years as governments have reached for leverage in negotiations but foregone the use of force. During this period, the alignment of the design and implementation of sanctions by the European Union and the United States has, on the whole, been an article of faith as the transatlantic allies have pursued mutual foreign policy objectives. Yet despite the consistency of objectives, the bureaucratic structures, technical mechanisms, and processes by which the European Union and the United States design and implement sanctions differ significantly. These differences—always present—have been amplified by the current stresses in transatlantic relations and may be further exacerbated when the United Kingdom leaves the European Union in March 2019. The reasons behind these differences are myriad and touch upon both structural matters (such as the construction of the European Union and the manner in which its member states can enact policy) and more philosophical matters, as the focus on due process and human rights in EU sanctions policy demonstrates. But given the importance of transatlantic ties and cooperation in managing the sorts of problems that sanctions are usually developed to address, it is important for both the United States and the European Union to work through these differences. Toward that goal, this paper provides a European perspective on US sanctions activity, where there are differences in approach, in particular EU attitudes toward secondary sanctions put in place by the United States, and it explains the complications that may result from the United Kingdom’s withdrawal from the European Union. The paper concludes with recommendations for how the European Union can address the challenges it faces in achieving an effective sanctions policy. In short, it recommends the following: The European Union should work through its structural issues to create a more decisive and effective EU sanctions policy. The implementation and enforcement of sanctions at the member state level must be improved, and a formal EU-level sanctions body is needed to independently monitor compliance with sanctions across the European Union. A clear mechanism for ensuring the coordination and effectiveness of EU-UK post-Brexit sanctions policy must be established. The global centrality of both the European Union’s economy and the United Kingdom’s financial sector combine to present a powerful sanctions force and must thus be closely coordinated to ensure maximum effectiveness. The European Union should directly address the matter of human rights exemptions by incorporating it as a key consideration of the EU-level sanctions body identified in the first recommendation. The European Union should establish a clear channel for human rights exemptions throughout the lifetime of sanctions regimes. The European Union should consider its options to address the ability of non-EU actors to abuse EU-originating supply chains and financial services, which represents a considerable sanctions implementation vulnerability. Finally, though US-EU misalignment on sanctions is growing, policy makers must stay seized of the necessity to maintain and improve communications and coordination to prevent current schisms from having serious long-term effects on international security.
Topic:
Foreign Policy, Human Rights, Sanctions, European Union, and Brexit
Political Geography:
United States, United Kingdom, and Europe

93. Russia’s National Oil Champion Goes Global

Author:
Edward C. Chow and Andrew J. Stanley
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
After the Soviet Union collapsed and Russia was roiled by political and economic chaos, many state-owned assets were privatized based on political connections and corrupt practices. The oil sector was a particularly attractive, but by no means the only, target for these privatizations. By the end of the 1990s, almost all of Russia’s oil production was privately owned. In spite of continued nontransparency, the oil sector began to resemble a competitive market with private investors introducing Western technology, financial accounting, and operating and management practices. It also started to attract major foreign investments. The remaining state oil assets were managed by a sleepy state enterprise named Rosneft that, in spite of its name (Russian Oil), produced less than 5 percent of Russia’s oil. Today, majority state-owned Rosneft produces almost half of Russia’s oil. Its daily oil production of 4.6 million barrels, according to its last reported quarterly results, is double that of the world’s largest oil company by market capitalization, ExxonMobil, which last reported daily liquids production of 2.3 million barrels. Rosneft’s rapid rise coincided with the rule of Vladimir Putin, who first became president of Russia in 2000. Its production increases were built largely on the backs of controversial acquisitions of assets previously held by private companies such as Yukos, TNK-BP, and Bashneft. Rosneft’s acquisition spree accelerated after Putin’s close associate and Russia’s then-deputy prime minister Igor Sechin became chairman of its board of directors in 2004. Sechin left government in 2012 to take over as Rosneft’s chief executive officer. Rosneft’s board of directors is now chaired by former German chancellor Gerhard Schroeder. Rosneft’s transformation as Russia’s national oil champion is consistent with Putin’s policy of regaining state control over the commanding heights of the Russian economy, which is more reliant on oil income today than the Soviet Union ever was. Rosneft is Russia’s largest taxpayer and contributed a quarter of government revenue in 2014. Until recently, Rosneft concentrated mainly on consolidating its dominance over the domestic oil patch. It is also Russia’s leading refiner and is increasing natural gas production for direct sales to domestic gas users, producing 67 billion cubic meters in 2016. In 2014, Russia was hit by the twin shocks of a global oil price collapse and Western economic sanctions enacted after its aggression against Ukraine in the Donbas region and annexation of Crimea. These developments affected Rosneft severely since it involved the value of the commodity it produces and sells and restricted Rosneft’s access to international financing when it was heavily indebted from the aforementioned acquisitions. A normal company might hunker down, repair its balance sheet, and wait for external conditions to improve. Instead Rosneft has done the exact opposite and expanded its international business aggressively. As part of the 2014 U.S.-led sanction efforts, Igor Sechin, as the leading figure of Russia’s largest petroleum company and his having “shown utter loyalty to Vladimir Putin,” was directly sanctioned. Further Russian sanctions enacted by Congress in 2017 called on the U.S. Department of the Treasury to submit a detailed report on senior political figures, oligarchs, and parastatal entities as determined by their “closeness to the Russian regime and their net worth.” While the unclassified version of the report released to Congress on January 29 included Igor Sechin, the report was poorly received and largely regarded as nothing more than a “rich list” by Russian experts. However, the report also contains classified annexes, including a list of parastatal entities and supporting analysis, which by definition would have included Rosneft. Although Rosneft’s rapid international expansion is too recent to assess definitely, this paper describes some of Rosneft’s overseas ventures and explores possible motivations, economic and political, behind them.
Topic:
Energy Policy, Oil, Foreign Direct Investment, Sanctions, Gas, Transparency, and Private Sector
Political Geography:
Russia, United States, Europe, and Eastern Europe

94. Going nowhere alone: US sanctions on Iran and the afterlife of the JCPOA

Author:
Fridtjof Falk
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
On November 5th, 2018, the Trump administration re-imposed severe sanctions on Iran. These sanctions, which President Obama called the “toughest sanctions ever faced by the Iranian government,” were lifted by the 2015 Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Deal. The JCPOA was signed with a view to blocking Iran’s alleged pursuit of nuclear weapons, allowing international inspectors into Iran in return for sanctions relief. Withdrawing the United States (US) from the deal was a prominent promise of Donald Trump leading up to the presidential elections of 2016. In a May 2018 speech that described the deal as rooted in “fiction,” President Trump made good on his promise to leave the JCPOA and to move to unilaterally re-impose sanctions on Iran.
Topic:
International Relations, Nuclear Weapons, Treaties and Agreements, Sanctions, Nuclear Power, and Economy
Political Geography:
Europe, Iran, Middle East, North America, and United States of America

95. A comparative study: Where and Why does the EU Impose Sanctions?

Author:
Christian Hörbelt
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
The use of the EU instrument of political and economic sanctions has continually been rising since 1987. However, the sanctions are used differently according to geographic vicinity, political motivation, and which security objectives the EU promotes. Clara Portela explored the European sanction regime for the period 1987-2003 and showed that the EU has different political motivations and objectives for each region and that, in particular, geographic vicinity plays a significant role for the application for sanctions. This article relates to Portela´s analytic approach from 2005 and verifies her hypotheses for the period 2005-2015. In summary, the article shows that the EU still focuses on geographic vicinity and security relevance. Only the area of sanction application has changed, moving from Eastern Europe to the Middle East.
Topic:
International Relations, Security, Foreign Policy, Sanctions, and European Union
Political Geography:
Russia, Europe, Eastern Europe, and Mediterranean

96. Between Supranationalism and Inter-Governmentalism in the European Union’s Foreign Policy: A Principal-Agent Approach of the Sanction Policy in the CFSP Framework

Author:
Constance Barbou des Courières
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
Integration in the EU Foreign Policy domain has been sporadic, preventing the EU from gaining traction internationally. However, the imposition of international sanctions has generated a great degree of member state cooperation at the EU level. From establishing a common sanctioning practice, to institutionalising the instrument as part of the CFSP toolbox, the EU sanction policy constitutes a fascinating example of delegation of foreign policy powers from the national to the supranational level. This article uses the Principal-Agent model in an attempt to make evident, as a result from the allocation of such powers to the EU, the power struggle between the national and supranational levels for the control of the sanction-making process. The analysis reveals that in spite of EU supranational bodies acquiring greater control over time, the member states have set up control mechanisms in order to limit the room for manoeuvre of the former.
Topic:
Foreign Policy, Sanctions, European Union, Intergovernmentalism, and Supranationalism
Political Geography:
Europe

97. Macron-Putin Meeting: Russophobia Souring Bilateral Relations and Jeopardizing Press Freedom in France

Author:
Dimitri de Kochko
Publication Date:
06-2017
Content Type:
Commentary and Analysis
Institution:
Rethinking Russia
Abstract:
The meeting of the Russian President with his French counterpart has testified to certain changes for the better. First, the anti-Russian sanctions regime imposed by François Hollande looks increasingly likely to be lifted. In addition, for all the arrogance of the French president, several statements allow us to hope for improved bilateral relations. He believes that he has the right to lecture Russia on how it should run its affairs. The French media immediately described his behaviour as an attempt to see “the sumptuous setting of the Palace of Versailles take Vladimir Putin’s breath away”.
Topic:
Bilateral Relations, Sanctions, and Freedom of Press
Political Geography:
Russia, Europe, Eurasia, and France

98. Belarus-West Relations: The New Normal

Author:
Dzianis Melyantsou
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
This paper is part of CTR's Working Paper Series: "Eastern Voices: Europe's East Faces an Unsettled West." The new geopolitical environment formed after the annexation of Crimea and the war in the Donbas, together with emerging threats and challenges, are pressing both Belarus and the West to revise their policies in the region as well as their relations with each other. In this new context, Belarus is seeking a more balanced foreign policy and, at least towards the Ukrainian crisis, a more neutral stance.
Topic:
International Relations, Diplomacy, International Trade and Finance, War, Territorial Disputes, Foreign Aid, Sanctions, and Geopolitics
Political Geography:
Russia, Europe, Ukraine, Belarus, Crimea, United States of America, and European Union

99. Allies Against Atrocities: The Imperative for Transatlantic Cooperation to Prevent and Stop Mass Killings

Author:
Lee Feinstein and Tod Lindberg
Publication Date:
03-2017
Content Type:
Special Report
Institution:
Simon-Skjodt Center for the Prevention of Genocide, United States Holocaust Memorial Museum
Abstract:
A generation after Rwanda and Bosnia, many of the world powers who apologized for their lack of an early and effective response to genocide during the 1990s have yet to organize themselves sufficiently to act early and effectively to prevent or stop mass atrocities. The horror of Syria is Exhibit A. As responses to past atrocity crimes show, averting and halting atrocities requires a coordinated and sustained effort by local, regional, and international actors. This report argues that a multilateral response is necessary and that the transatlantic region has a critical role to play in shaping and leading these efforts. The governments of the transatlantic community—the United States, Canada, and Europe—already devote significant resources and political capital to the prevention and amelioration of crises and conflicts, as well as to the pursuit of international development agendas. Without better cooperation among themselves and their like-minded cousins, efforts to address mass atrocities will continue to be reactive, slow, and devastating to human life and potential. Individual transatlantic countries should be involved in those efforts, each bringing its unique capacities to the table. From the vantage point of the report's authors, the United States has a particularly important role to play in encouraging greater transatlantic cooperation among states on this issue. Principle Recommendations: Devise and implement coordinated transatlantic atrocity prevention efforts Internationalize atrocity prevention efforts Improve coordination of financial sanctions Develop an international legal framework adequate to the challenge of atrocity prevention Prioritize civilian protection in military responses that include peacekeeping
Topic:
International Cooperation, Sanctions, Peacekeeping, Civilians, Atrocities, Transatlantic Relations, Atrocity Prevention, and Protection
Political Geography:
Europe, Canada, North America, and United States of America

100. Calling a Spade a Spade: Canada's Use of Sanctions

Author:
Andrea Charron and Paul Aseltine
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
Canada’s use of sanctions is little studied which means the full scope and effect of this tool are not appreciated. Until 2006, Canada applied sanctions in support of the United Nations almost exclusively. Since then, Canada has also applied discretionary sanctions in support of allies such as the European Union and United States’ measures in addition to those required by the UN Security Council. Lacking extraterritorial reach and with this new tendency to layer sanctions (applying UN and additional measures) requires the navigation of multiple pieces of Canadian legislation. Banks and private companies, which are largely responsible for giving effect to Canada’s sanctions, must navigate this legislation. This has ensnared a few Canadians in the process with little evidence that Canada’s application of sanctions is compelling its targets (people, companies, and states) to change their behaviour. Canada’s application of sanctions is a signal of its desire to support multilateral, collective security efforts – nothing more or less.
Topic:
United Nations, Sanctions, European Union, and Banks
Political Geography:
Europe, Canada, North America, and United States of America