collective on geoeconomic
1 INTRODUCTION
In the article Sanctions: what why warfare won’t work, it was stated that financial sanctions – regarded as part of proxy wars – are defined as processes to prevent an entity from carrying out transactions and/or financial services with a person or organisation (known as ‘the target’). They exist for a variety of political, military, social, and economic reasons by preventing, pressuring, or restricting targets in an effort to curtail their activities (from terrorism financing to the purchasing of weapons of mass destruction).
The US has abused its financial foundation and technological platforms to engage in more than mere economic coercion in the application of sanctions but they coexist as part of geopolitical positioning in maintaining a political hegemony. Many may be surprised to know that the US Congress has enacted domestic laws such as the International Emergency Economic Powers Act, the Global Magnitsky Human Rights Accountability Act and the Countering America’s Adversaries Through Sanctions Act, besides legislative suite of executive orders to target and sanction specific countries, entities or targeted individuals.
Often, these are ambiguous rules and executive orders, such as the “minimum contacts principle” and “doctrine of effects”, that are no more than a wilful expansion – and extension – of the jurisdiction of US abusive domestic laws of prosecution acting or exercising as the long-arm jurisdiction of a hegemon over entities and individuals in other countries.
2 COUNTRIES AFFECTED BY SANCTIONS
A] As an instance, for more than 60 years, in total disregard of the many resolutions of the UN General Assembly, the US has continued its comprehensive blockade against Cuba based on its embargo policies and domestic laws such as the Torricelli Act and the Helms-Burton Act.
The Cuba blockade is the longest and cruelest systemic trade embargo, economic blockade and financial sanctions in modern history – even in the midst of a COVID pandemic by restricting syringe imports to this country.
The blockade is gravely detrimental to Cuba’s economic and social development, causing over US$922.6 billion of direct losses to her economy.
Now, hypocritical to the core, a group of 26 House Democrats has urged President Joe Biden to easing sanctions against Cuba with a view to increase the distribution of Cuba´s home-grown COVID-19 vaccines worldwide, saying that Cuban vaccines, produced at reduced cost even with limited infrastructure, could assist the Joe Biden administration’s goal to distribute cheap and effective vaccines worldwide!
B] The US has also carried out blockade and sanctions against Iran since late 1970s. In May 2018, the US government announced its unilateral withdrawal from the JCPOA, (The Joint Comprehensive Plan of Action, known commonly as the Iran nuclear deal or The Iran Deal, is an agreement on the Iranian nuclear program reached in Vienna on 14 July 2015, between Iran and the P5+1 together with the European Union) and soon after, resumed and expanded sanctions against Iran. The resultant outcome is that many countries and relevant entities were forced to give up their cooperation with Iran. A large number of foreign oil enterprises left the country. Iran’s manufacturing industry could not maintain nor sustain normal operation and as a result she suffered an economic slowdown, coupled with heightened inflation and massive currency depreciation.
Then, there is the lingering question of what had happened to an estimated $100-120 billion in frozen Iranian assets which were reportedly being held by banks and institutions around the world in 2015 that could possibly yield – since the overthrow of the shah – $10 billion of high rate of interest during the 1970s.
This extra-territoriality of US sanctions, in the words of France’s Finance Minister, Bruno Lè Maire, makes the US ‘the economic policeman of the planet’, and that is ‘not acceptable’.
C] The US has also imposed unilateral sanctions on Belarus, Syria and Zimbabwe, among others, over the years, and ratcheted up “maximum pressure” against the DPRK (north Korea), Venezuela, and together with other emerging country economies like Iraq.
D] In 2003, President Bush signed an order to take possession of the Iraqi government assets that were frozen in 1990, before the Persian Gulf War. As a result, seventeen of the world’s biggest financial institutions were told by the Treasury Department to hand over $1.7 billion in frozen Iraqi assets that the U.S. government intended to place in an account at the NY Fed.
E] In 2015, it was announced that $67 billion in Libya’s assets remained frozen from 2011. In 2018, it was announced that Libya’s assets had decreased to $34 billion. The UN Libya Experts Panel is still “looking for answers” to explain the disappearance of $33 billion in frozen assets.
F] KUWAIT, in 1990, President Bush denied Kuwait’s government access to the foreign petrodollar investments, valued at close to US$100 billion.
G] The US has even shown no mercy in coercing its allies. Out of its geopolitical and energy interests considerations, the US has imposed sanctions on the Nord Stream 2 natural gas pipeline project since December 2019. Since the outbreak of the Russia-Ukraine conflict, the US has imposed new sanctions on related companies and personnel even though Germany had announced the suspension of the certification process for the project.
H] On the Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) List, and a few other entities, last February, the Office of the United States Trade Representative (USTR) put WeChat and AliExpress on its latest Notorious Markets List, while Pinduoduo and other Chinese companies as well as nine physical markets located within China are still remained on the list, ( bloomberg, 17/02/2022).
I] In order to force the Nepalese parliament to approve the Millennium Challenge Corporation (MCC) agreement, the US even openly issued an “ultimatum”, saying that the US will review its ties with Nepal if it fails to ratify the Nepal Compact (Katmandupost, 22 June 2022).
J] The US government froze seven billion US dollars assets of the Afghan central bank on the grounds of punishing the Afghan Taliban and even claimed the “life-saving money” of the Afghan people as its own, which resulted in the deterioration of the humanitarian situation in Afghanistan. Besides the Afghan War, collateral damage to the country’s economy is that with the start of the CIA secret war, opium production along the Afghanistan-Pakistan border surged and refineries soon dotted the landscape.
Mohammad Naeem, spokesman of the Taliban Political Office in Doha, said the seizure is “indicative of the lowest level of human and moral decay of a country and a nation”, (The Nation, 22nd June 2022).
J] After the outbreak of the Ukraine conflict, the US Justice Department established the “Task Force KleptoCapture” to find, freeze and seize the yachts, apartments, private jets and huge deposits of Russian citizensin the US and Europe. This truly shows any US-touted “inviolable and sacred right to property” is just blatant lies. The US had even arm-twisted other countries to pick sides asserting pressure to force them to join such sanctions against Russia; those who refuse to do so would pay a “price”, (Newsweek, 14/03/2022).
American scholar Alexander George first articulated the concept of “coercive diplomacy” to summarize such a US policy toward Laos, Cuba and Vietnam. The US government forced the military government of Haiti to step down in 1994, and referred to that as “a textbook example of coercive diplomacy”, spending in 2003, well over US$30 billion as additional military expenses for “coercive diplomacy”.
American foreign policy since World War II has been based on a simple idea: “Either you are with us or against us. America should lead, allies should follow, and woe be to countries that oppose its primacy”. This ethos lays bare the sickness of US coercive diplomacy.
3 SYNDROME of SANCTIONS
According to the Center for Economic and Policy Research’s 2019 report, 40,000 people have died in Venezuela since 2017 due to U.S. sanctions. According to a new report, sanctions against North Korea found that 3,968 North Koreans died due to sanctions-related delays and funding deficits in 2018, including 3,193 children under the age of 5 and 72 pregnant women. A report on Iraq from 1995 attributes the death of 576,000 children to U.S. sanctions.
Other examples include Haiti and Lebanon.
Haiti was subject to sanctions from 1992-1996 and simultaneously suffered Hurricane Gordon in 1994, which resulted in 2,000 deaths and disappearances in addition to the deaths of thousands of children directly caused by U.S. sanctions. In the case of Lebanon, food, clothing, and medicine intended to be used to relieve human suffering were specifically blocked.
i. Indeed, various international data gathered and collated governmental statistics have shown that the previous US administration had imposed over 3,900 sanction measures, which means it wielded its “big stick” three times a day on average. As of fiscal year 2021, the entities and individuals on US sanction lists topped 9,421, which was 933 percent higher compared to the fiscal year 2000.
ii. The US’s illegal unilateral sanctions and long-arm jurisdiction have gravely undermined the sovereignty and security of other countries and severely impacted their economic development and people’s wellbeing. These unilateral executive actions are no more than complete and gross violation of international law and basic norms of international relations.
iii. In an article published in the September/October 2021 issue of Foreign Affairs, Daniel Drezner, Professor at Tufts University and Senior Fellow at the Brookings Institution, criticizes successive US administrations for using “sanctions as the go-to solution for nearly every foreign policy problem.” He notes that sanctions not only are ineffective, but also “exert a humanitarian toll”, and that the United States of America has become the “United States of Sanctions”. Writers in The International had penned various aspects of sanctions with its theme “Because Sanction sounds better than genocide“.
iv. It can also be expressed that sanctions are a form of proxy warfare that can also deploy electronic warfare techniques like:
The “Clean Network” program launched by the POTUS Trump administration is a textbook example of US coercive diplomacy. Under the pretext of upholding US national security and citizens’ privacy, the program explicitly requires, as an instance, that Chinese companies such as Huawei, Baidu and Alibaba to be purged from five sector-areas: telecom operators, mobile app stores, mobile apps, cloud services and submarine optical cables.
The then US Secretary of State Mike Pompeo and other US politicians lobbied all around the world, coercing countries and regions to join its so-called “Network”. A US senior official even threatened Cyprus and other countries not to work with Chinese 5G suppliers, or they would bear the consequence. Former UK Business and Industry Minister Vince Cable said the government’s decision to ban Huawei’s 5G equipment and services “had nothing to do with national security”, but because “the Americans told us we should do it”.
Economic sanctions violate international law and the fundamental principles that govern diplomacy and multilateralism under Chapter VII of the United Nations Charter. Further, they circumvent human rights obligations and international humanitarian law set forth in the Fourth Geneva Convention, the Genocide Convention, Nuremberg Charter, Constitution of the World Health Organization, and in the Universal Declaration of Human Rights, and Rome Statute of the International Criminal Court. Additionally, since economic sanctions violate international law, they are thereby in violation of domestic law pursuant to the Supremacy Clause of the U.S. Constitution and U.S. Supreme Court’s decisions holding that “international law is our law”, (John W. Bricker and Charles A. Webb, Treaty Law vs. Domestic Constitutional Law, NOTRE DAME LAWYER, August 1954).
4 MONOPOLY-CAPITAL COLLUSIONS
J. W. McCallister, an oil industry insider with House of Saud connections, wrote in The Grim Reaper that information he acquired from Saudi bankers cited 80% ownership of the New York Federal Reserve Bank (The NY Fed) – by far the most powerful Fed branch – consist of just eight families, four of which reside in the US. They are the Goldman Sachs, Rockefellers, Lehmans and Kuhn Loebs of New York; the Rothschilds of Paris and London; the Warburgs of Hamburg; the Lazards of Paris; and the Israel Moses Seifs of Rome.
The NY Fed is the bank the United States government uses to administer approximately 250 foreign government accounts, according to its 2015 promotional material.
To better understand how precarious the U.S. economy is due to profiteering by the NY Fed’s dealers, consider that they take between $20 to $30 billion in net assets under management and leverage it up to $200 billion. In 2017, the top 25 U.S. banks were reported to have $222 trillion of exposure to repos/derivatives. This level of exposure is equivalent to 12 times the Gross Domestic Product (GDP) of the United States. Therefore, under present inflation-high condition, it is absolutely clear that the U.S. high dependence on repos undermines its economy. Suffice to articulate that all the sanction global theft will not stave off the political-economic hegemony inevitable and impending systemic collapse.
Another method used by the Treasury to redistribute and concentrate wealth is through the granting of exclusive monopoly style sanctions waivers/licenses in a veiled process that benefits select corporations and individuals. Through this method, the U.S. can target entire industrial sectors within countries such as the oil, pharmaceutical and agricultural industries to decimate them and force dependence on the products/services of elite U.S. corporations.
Lastly, through sanctions waivers/licenses it can reward countries favorable to U.S. corporations by eliminating its global competition. One must also note how sanctions against Venezuela and Iran increase Saudi Arabia’s oil industry market share. Owing to the various sanctions upon Iran, Saudi Arabia overtook Russia to become China’s top oil supplier, though since the Ukraine conflict, by April 2022, Russia has displaced Saudi Arabia once again to become China’s largest oil supplier.
5. SWIFT DECLINE of VULTURE CAPITALISM
Trade embargoes and financial sanctions are central in monopoly-capital determined control of economic activities beneficial to a new age in neo-imperialism design, (Suwandi, 2018). Not to be de-emphasised is that sanctions are beneficial to the US capital class.
Since the start of the great recession in 2008, the U.S. has become increasingly dependent on the use of unilateral economic sanctions to achieve its policy objectives against its declared targets.
Often, behind the shadow of secrecy laws that effectively prohibit any form of public accountability – there are intermediaries that facilitates the theft of public wealth from targeted countries on a scale only previously executed through military interventions.
Indeed, economic sanctions are increasingly served to justify and conceal theft, through asset freezes and seizures, at a pace equally accomplished through foreign invasion and extra-territorial occupation.
Uncovering the big winners of U.S. economic sanctions, it is found that ExxonMobil and JP Morgan Chase Bank are often the front-centers gaining through distress situations in Iran, Iraq, and Venezuela. Also, consider that JP Morgan Chase Bank did performed extremely well in the Great Financial Crisis of 2008 collapse through vulture capitalism – which is a type of venture capitalist (VC) who looks for opportunities to make money by buying poor or distressed firms.
However, all these dastardly U.S. economic sanctions contain the seeds of their own mishaps because indirectly they engender the expansion of foreign reserve currencies at the expense of the U.S. dollar, and the phasing out of the U.S. money transfer system (SWIFT) to alternate foreign models such as Russia’s System for Transfer of Financial Messages (SPFS) that uses technology similar to SWIFT’s and China’s CIPS (Cross-border Interbank Payment System (CIPS). Operational since 2015, CIPS is administered by China’s central bank. As at 2021, CIPS had 80 financial institutions as members, including 23 Russian banks that held nearly a third of world renminbi reserves, (IMF, March 2022, The Stealth Erosion of
Dollar Dominance; see also Anis Chowdhury and Jomo Kwame Sundaram, SWIFT dollar decline.
Overall, one needs to look at the present Ukraine conflict as an extension of a grand strategy in maintaining U.S. hegemony through trade war, a tech war, financial sanctions and military heavy fires to abrogate the European Union proximity relationships with Russia and China by sustaining the Eurasian ecoeconomic arch with domination in a geopolitical positioning.
List of References
Marc Bossuy,The adverse consequences of economic sanctions on the enjoymen of Human Rights, Global Policy, June 21, 2000.
Monthly Review, United States imposed economic sanctions – the big heist, 2020/03/10
MRonline, The Ultimate Guide on Sanctions Against Venezuela, May 01, 2022.
Nicholas Mulder, The Economic Weapon – The Rise of Sanctions as a Tool of Modern War, Yale University Press, 2022
NLM, Financial Sanctions under pax America, newleftmalaysia, 12/03/2022.
NLM, The Federal Reserve Cartel – the Eight Families, newleftmalaysia, 12/03/2022.
Wikiwand, International sanctions during the 2022 Russian invasion of Ukraine
Firestorms 