Towards Total Control: The Inward Turn of Western Sanctions
Economic sanctions, regardless of the form they take, have long been a tool of governments worldwide in pursuit of political agendas. Examples ranging from blockades to embargos are frequently locatable throughout history, often employed to the explicit end of economically punishing a government’s enemies and opponents for actions contra to said government’s political objectives.
A favorite sort of economic punishment measure for governments across the Western World, particularly those in the Anglosphere and the European Union, are banking-related sanctions against foreign individuals and organizations. In the case of the United States, for example, one of the world’s most-prolific users of economic sanctions, measures restricting banking activities have been liberally employed on the American government’s enemies since the Cold War, on targets ranging from North Korea and the then Soviet Union to South Africa in the 1980s.
Following the Cold War, the US in particular has continued to utilize its hegemonic control of the international financial system, beginning with the imposition of strict sanction regimes on countries such as Iraq and Syria. Since 2010, the US has moved further to punish nations such as Iran with disconnection from the Western-controlled SWIFT system of international financial transactions, as well as seizing money from European banks participating in transactions apparently in violation of the US’s longstanding embargo of Cuba.
Perhaps the most relevant and obvious example, however, of US-Western sanction activities in the 21st century is the current regime of sanctions against actors and organizations within the Russian Federation and its allies following the beginning of Russian military action in Ukraine in Feburary 2022. Targeting Russian state officials, private citizens, and corporate organizations, the nascent sanctions package against Russia, made up of actions from the US, UK and Commonwealth, European Union, and Eastern allies such as Japan and South Korea, seemingly seek a totalizing economic blow to the Russian economic sphere. In addition to hitting targets within Russian borders, Western nations such as the US and UK have taken further steps against Russian individuals within their own borders, with the UK in particular freezing and seizing the bank accounts and assets of Russians within British borders. Due to this aforementioned totalizing nature, it might be stated that these sanctions, especially the freezing of private bank accounts in the West, represent a massive flex of the US-led order’s economic muscles.
This latest flex, viewed in the context of the last century’s history of economic sanction measures, demonstrates two things fundamentally. The US (and resultantly its Western allies and collaborators in the Post-War Economic Order) wields an unprecedented degree of economic control over international financial affairs, and that this control seems to exist with barely any sort of check on its power or imposition. In fact, due to the often-unilateral nature of American sanction regimes’ deployment, countries such as Russia and China have recently moved to develop parallel alternatives to systems such as SWIFT. Such developments, should they continue and yield successful results, might eventually represent a way for countries opposed to American state interests to act with less fear of total economic punishment from Washington D.C.
What is at once the most interesting but also the most concerning aspect to note of Western economic control is something only briefly mentioned previously in this short piece: the (very) recent move by governments towards the freezing of bank accounts and personal assets as a form of political-economic sanctions. At first glance, the concerning nature of this development might require some further explanation. The targeting of banks and even the assets of political enemies is nothing new, as even at the turn of the millennium the property and holdings of suspected “terrorists” were made liable for seizure as part of the infamous USA PATRIOT act of 2001. However, even aside from the obvious connection of this practice to slippery-slope arguments, the sheer rate at which this practice has escalated is shocking to behold for both its present effects and future implications. These implications and present effects, however, are not in reference to asset seizure’s international, but its domestic, implementation.
Whilst the seizure of foreign enemies’ assets is (regardless of its moral implications) of historical precedent, the last few years have demonstrated the rapid and blanket expansion of this practice to political dissidents and regime opponents within the Western world. In the US, for example, political dissidents have seen their financial assets seized or bank accounts frozen without ever being charged with a single crime, possibly under the same laws employed against foreign terrorists only a few years prior. In what is perhaps an even-more egregious example, the Canadian government in early 2022 publicly legalized and authorized the state to freeze the bank accounts of peaceful participants in demonstrations against Covid restrictions, those who, again, were never formally charged with a crime.
Regardless of one’s opinion on these events and their political implications, it is striking to note the emergence of this phenomenon alongside the increasing contemporary expansion of international asset seizure. Whether or not the two practices have been enacted via the same laws or for the same reasons, their simultaneous public employment by Western states cannot help but create an ample and worrying precedent, a precedent for these powers’ and actions’ potential further expansion onto domestic political opponents. Such an expansion would not be without precedent, as trends of both social and economic de-platforming have been increasingly commonplace along political lines in the private sector in the last few years, providing an example of how the current public precedent coincides with a private counterpart.
It should be worrying to any citizen of the Western world that their governments not only have the power to unilaterally seize and freeze their assets at will, but that this power, previously decried by the West when used in in Hong Kong, is now employed by self-declared liberal democracies. Furthermore, the recent moves by the Biden government in America to consolidate a federal cryptocurrency policy, as well as the FBI suggesting Russian crypto assets are not safe from American seizure, reveal that even “secure” cryptocurrencies may not insulate civilians from being targeted with asset freezes in the future by malicious government actors. Rather than being a slippery slope, the worry of freeze/seizure sanctions’ domestic employment escalating as its international counterpart has done is a real and ever-increasing concern for anyone weary of state overreach and totalization.
It appears now, ultimately, that the sanctions regime previously designed and targeted at perceived foreign enemies has been redirected home towards new, domestic ones. Simply put, the recent employment of what were previously internationally targeted sanctions on domestic soil is a real and horrifying development. We can only guess what the future of both international and domestic sanctions can entail, but if recent trends are to be believed, total and arbitrary economic control is a dark, but all-too-likely outcome.
Image courtesy of Emilijaknezevic via Wikimedia, ©2022, some rights reserved.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the wider St. Andrews Foreign Affairs Review team.
