The Biden administration’s approach to sanctions will be markedly different from the approach former President Trump took while in office, according to a report released on July 5 by the Wall Street Journal.
The announcement comes as a policy review that the Biden administration began earlier this year nears completion. Details of that review and specific changes to US sanctions policy are expected to be released later this summer. But administration officials have signaled that a significant rollback of punitive sanctions is in the works. They have also indicated that the Biden administration will seek to build international consensus and coordinate the imposition of sanctions with allies — which constitutes a significant departure from the unilateral approach the US took under President Trump.
That is certainly in alignment with other steps President Biden has taken since assuming the presidency.
Indeed, in late April, the administration indicated it would be willing to ease punitive sanctions imposed against Iran under President Trump to incentivize Iran’s cooperation in returning to the terms of the 2015 nuclear deal, one of the administration’s key foreign policy initiatives. Then, in early June, days before the sixth round of negotiations to restore the deal was set to begin, the Biden administration announced the removal of three former Iranian officials and several energy companies from sanctions lists. It was a move the administration labeled as routine — the officials no longer held the same positions — yet also one that, according to Secretary of State Antony Blinken, shows a “commitment to lifting sanctions in the event of a change in status or behavior by sanctioned persons.”
It stands to reason that other US adversaries such as Venezuela and Syria may also start to see a shift in approach. President Biden already announced it would temporarily lift certain sanctions to facilitate access to COVID-19 relief and medical supplies. However, Biden’s wider foreign policy objectives vis-à-vis these two countries haven’t yet been clarified, and it’s too early to determine which sanctions imposed by the Trump administration may be repealed or modified.
None of this is to say that the Biden administration has shied away from using sanctions as a foreign policy tool. Still, it has sought to do so in coordination with other allies. For example, together with the EU, Canada and the UK, the US has continued to apply economic pressure on China for alleged human rights abuses in Xinjiang. The US has also collaborated with the EU to impose sanctions on Belarus following the hijacking of a Ryanair flight and imprisonment of dissident journalist Roman Protasevich by Belarusan officials in late May. Finally, the US and Switzerland announced this week that they were both imposing sanctions against military officials in Myanmar in response to the military coup earlier this year and the violent crackdown against protesters afterward.
So, while there may be a loosening of some sanctions restrictions on specific countries, other countries, especially those vulnerable to corruption and human rights abuses, may face increased scrutiny. Nevertheless, financial institutions would do well to ensure their compliance programs can quickly adapt to changes in sanctions programs