Sanctions only work with verification

David Cohen, former deputy director of the CIA, gave a talk on the use of sanctions in Iran and North Korea at the Summer Institute Speaker Series at the Hebrew Center. — Courtesy U.S. Department of Trea

At the Summer Institute Speaker Series, former deputy director of the CIA David Cohen admonished President Donald Trump for not following the advice of Elvis, “Wise men say only fools rush in/ and I can’t help falling in love with you.” According to Cohen, Trump blundered at the Singapore summit with North Korean leader Kim Jong-un. He rushed into talks with Kim and gave the North Koreans much of what they wanted, notably stopping war games in the area, without getting any concrete policy promises in return. Trump’s actions at the summit left the U.S. in a bad position to continue effective pressure for a denuclearization of the Korean Peninsula.

Cohen spoke on the use of sanctions for denuclearization in Iran and North Korea, using the two countries as case studies for what situational factors are conducive to sanctions being effective.

There are five ingredients to an effective financial sanction. One, there has to be a clear articulation of a policy goal. Sanctions don’t work if they are put in place to pressure a state into conforming to an ideology or vague idea. Two, sanctions have to be used alongside other measures, such as diplomacy or the threat of escalating military action. Three, there needs to be good intelligence. The United States needs to know if their measures are working, and what or whom to target with sanctions. Four, there needs to be international cooperation. This broadens the available targets of sanctions. If the U.S., for example, doesn’t buy Iranian oil, but China does, the U.S. can work to make it in China’s best interest to not buy Iranian oil. Five, sanctions have to be applied to a target that is an important player in the financial system. For example, sanctions can be placed on financiers of terrorist groups, or on products that generate revenue.

If all of these aspects are in place, the sanctions will most likely be effective.

In Iran before the nuclear deal, Cohen said, all of the pieces were there. In the 1990s the U.S. received evidence that Iran was developing a nuclear program. Sanctions were first put in place in the early 2000s, with the goal of ending Iran’s nuclear program. By 2010 and leading up to the deal in 2015, sanctions were increasing. This was facilitated by international support, which led to fewer buyers for Iranian oil. Payments for whatever oil Iran was able to sell remained frozen in the purchaser’s state, unable to be brought back to Iran. This policy was losing Iran millions of dollars a week. The U.S. also maintained that a military option continued to be on the table. Under this economic pressure, Iran’s economy went into a recession. Unemployment skyrocketed and, Cohen said, according to U.S. intelligence, the Iranians were coming to the realization behind closed doors that the way out was to negotiate.

Critics of the deal argued that negotiators didn’t push Iran hard enough with terms for the deal. However, after reneging on the deal, Cohen said, “Donald Trump breached the basic cooperative bargain.” By threatening a reinstatement of maximum pressure, he has taken out at the knees some of the key aspects that make sanctions effective.

Trump’s reasoning for pulling out of the agreement was that he would come back with a new and better Iran deal. This is not a clear policy goal, and without that, the sanctions are directionless, with questions Cohen raised about the true motivations behind their implementation. Is Trump actually trying to get a better deal? Is he trying to punish Iran? Is he trying to compete with Obama? Is he trying to topple the Iranian regime? Certain states have shifted their support from the U.S. to Iran on this issue, making it more difficult for the U.S. to impose sanctions on certain markets that they or their allies don’t have direct contact with. These changes in the situation in Iran from when Obama was coming to negotiations versus when Trump would be trying to arrange negotiations make it highly unlikely Iran will come to the table this time around, Cohen predicted.

North Korea is another thorny issue. Sanctions are difficult to impose on the state, for various reasons. North Korea is notoriously secretive. The U.S. and their allies don’t have embassies in the state, and few people travel in and out of its borders, making it difficult to gather intelligence. This makes it nearly impossible to identify targets for sanctions, or to ascertain if the sanctions are working.

North Korea also does not typically do a lot of business in dollars. One of their main trading partners is China. This makes it impossible for the U.S. to impose effective sanctions on trade with North Korea. They would have to get China to refuse to do business with North Korea, and at the time, China saw it in its national interest to maintain stability on the Korean Peninsula, not attain denuclearization.

During the Obama years, according to Cohen, in the decision room, Secretary of State John Kerry and Vice President Joe Biden, among others, chose to pressure China on other issues and leave North Korea for later.

Curbing North Korea’s nuclear program, Obama famously warned Trump, would be the greatest challenge of his presidency. Trump called the challenge met in the aftermath of Singapore. After the Singapore summit, however, Cohen said, “The North Koreans aren’t going to move forward with denuclearization.” Trump calling the summit a victory makes it seem on the international stage that the U.S. has achieved the goal the sanctions were trying to accomplish. Without a concrete plan as to what denuclearization would look like, and when it would be complete, Trump has gotten little more than window dressing from North Korea. Given the lack of intelligence being gathered in North Korea and the declaration of victory from Trump, “the possibility of enforcing sanctions is now nil,” said Cohen.

It was not a happy note to end on, but Cohen closed his talk with a warning — sanctions are the intermediate step between diplomacy and military intervention. The threat of violence between the U.S. and Iran and North Korea is escalating. Americans don’t have cause to sleep easy at night any more than they did when Trump and Kim were exchanging threats of fire and fury. The international community has to address nuclearization of states, and military action is the last option, if sanctions don’t work.