This article was drafted following a Perry World House conference on “The Intersection of Sanctions and Corruption,” which was made possible in part by a generous grant from Carnegie Corporation of New York. The views expressed are solely the author’s and do not reflect those of Perry World House, the University of Pennsylvania, or Carnegie Corporation of New York.
This series follows a symposium by the Perry World House at the University of Pennsylvania, organized in partnership with Distinguished Visiting Fellow Richard Nephew, that brought together scholars and practitioners to examine how sanctions and anti-corruption policy interact. The conversation surfaced a range of questions, including:
- Do sanctions deter corrupt actors? If so, what types of sanctions are most effective in doing so?
- Do sanctions themselves generate corruption risk and, if so, is that cost worth the policy benefit?
- Do sanctions function differently when the target is an autocracy versus a democracy?
- Are sanctions tools helpful in making the harms that elite corruption inflicts on ordinary people legible to the public?
- How should policymakers confront conduct that is technically legal but corrosive of democratic institutions? Are sanctions appropriate to address “lawful but awful” conduct?
The answers to these questions, as you will see, are not always clear but most certainly important.
When the United States or other countries want to pressure or punish an actor in the international system – especially when resorting to military force would be unlawful, unwise, or both – often the default policy choice is to implement sanctions. For a policymaker, sanctions can serve several purposes. First, sanctions enable a government to make a loud and decisive public statement conveying their displeasure with an action or policy and to name and shame those responsible. Second, sanctions have serious consequences (generally financial consequences, real or anticipated) that are intended to compel the sanctioned actors to change course. Third, sanctions, when accompanied with serious diplomacy, can enable the building of coalitions that make the consequences more biting and the offramps more appealing. This last point is also key – to be effective, sanctions regimes need built in offramps, allowing targets to earn relief through changed behavior. Sanctions tend to be most effective when they target the entities and sectors in the places most consequential to the actors in question, paired with a strategy to lift those sanctions once compliance is achieved.
However, for a range of reasons, sanctions in practice often fall short of their desired outcomes. Despite some success in the multilateral effort to use sanctions to slow Russia’s war against Ukraine, the war continues. Similarly, despite the reimposition of so-called “maximum pressure” on Iran, the U.S. administration has chosen to go it alone rather than build a true multilateral coalition and has not presented viable off-ramps; so, predictably, the underlying standoff remains unresolved. Governments frequently, when putting sanctions in place, overpromise outcomes without outlining clearly how targeted actors can modify their behavior to secure relief, or doing the diplomacy required to make the sanctions effective and the exit strategies sustainable.
Anti-corruption specific sanctions tools are no different. For policymakers, targeting corrupt actors through financial sanctions, visa bans, and asset freezes names wrongdoers publicly, imposes financial and reputational consequences, and signals that elite impunity has limits, all without the diplomatic costs of more aggressive measures. Over the past two decades, the United States has built out an increasingly sophisticated toolkit, from the Global Magnitsky Act to Section 7031(c) visa bans to the Combating Global Corruption Act. Yet here too, the results have often fallen short of the rhetoric. Designated actors frequently continue operating through networks of enablers, including lawyers, financiers, real-estate agents, and corporate-formation services, many of them based in the very democracies imposing the sanctions. And recent U.S. policy reversals, from the dismantling of the KleptoCapture Task Force to the pause on enforcement of the Foreign Corrupt Practices Act and the Corporate Transparency Act, have called into question whether the United States is prepared to play the anti-corruption leadership role it has long claimed.
Against that backdrop, the intersection of sanctions and global corruption remains understudied. Understanding how these tools interact, and how they can be deployed more effectively, is essential for any serious effort to counter corruption globally. The essays that follow take up these questions from multiple angles: the limits and possibilities of existing sanctions authorities, the structural features of sanctions regimes that themselves generate corruption risk, and the domestic reforms needed if the United States is to credibly lead on anti-corruption enforcement.
