Global sanctions are a powerful instrument used to address a range of geopolitical issues, from nuclear proliferation and regional conflict to human rights abuses and counter-terrorism. However, their impact is often complex and subject to unintended consequences. Moreover, the constantly evolving nature of the global political landscape and the existence of illicit networks challenge the effectiveness of sanctions. This makes it crucial that sanctions are continually monitored, adapted and updated. LSEG World-Check helps financial institutions navigate these challenges by automating the screening of customer and transaction data against global sanctions lists. Failure to comply can result in fines, reputational damage and exclusion from critical financial networks.
Despite these shortcomings, the use of sanctions continues to be popular with voters and politicians. In part, this reflects the desire for foreign policy interventions that do not involve the risky and expensive military option. It also reflects the fact that sanctions can be imposed against states, regions and individuals that are guilty of severe offenses, such as oppression or violence.
Nevertheless, it is important to recognize the limitations of sanctions and understand their unintended consequences before they are implemented. Sanctions must be carefully calibrated and should primarily target policymakers and selected economic sectors to be effective. They should be developed with exit scenarios in mind and must take into account the cost to the sanctioner’s own economy. Ultimately, the success of sanctions depends on the capacity to forge large coalitions and to implement them consistently.