Author: Zulfi Meerza 16 May 2023
The United States and European Union have recently made it clear that they are committed to working more closely on sanctions in order to achieve shared foreign policy goals.
A three-day meeting at the end of April saw representatives from the US Department of Treasury’s Office of Foreign Assets Control (OFAC), the European External Action Service (EEAS), and the European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) exchanging best practices and strengthening working relationships.
The purpose of the meeting was to share expertise to enhance and improve sanctions design, implementation and compliance. Ways of aligning the implementation of sanctions, promoting compliance and strengthening enforcement were analysed. There was also discussion about ensuring sanctions do not prevent humanitarian trade and assistance reaching those in need and preserving internet freedom for those in sanctioned jurisdictions.
It remains to be seen precisely what will result from these talks or what form any such action will take. But the three-day event can be viewed as a clear recognition that sanctions will be most effective when they are coordinated with a broad range of international partners who can maximise their potential economic and political impact.
It is unsurprising that this announcement came shortly before the G7 meeting In Japan (in May 2023) unveiled further sanctions targeting Russia over its war against Ukraine.
The US and European Union have generally sought to thematically align the sanctions measures they impose. Although differences remain between their regimes - creating compliance complications for companies and jurisdictional issues - these latest efforts are a positive step towards achieving a more streamlined approach to international sanctions.
The EU, however, is well behind the US when it comes to enforcement, as most countries are. The fact that the EU is considering setting up its own version of the US’ Department of the Treasury’s Office of Foreign Assets Control (OFAC), which administers and enforces economic and trade sanctions, may well be an overdue development. But it could prove useful in coordinating sanctions enforcement efforts across member states.
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