Decoding the vocabulary of statecraft.
Secondary Sanctions
| Riva Ganguly Das Former Indian High Commissioner to Bangladesh; former Ambassador to Romania, Albania, and Moldova. | Prashant Khurana A Delhi-based attorney with an LL.M. in Business Law from UCLA. |
| Secondary sanctions are designed to prevent third parties from trading with countries subject to sanctions issued by another country, even if these third parties are not citizens of the issuing country or based in the issuing country. Secondary sanctions are sometimes controversial as they are considered an extraterritorial application of US laws and used as a means of influencing the decision-making processes of countries that would not otherwise be in violation of US sanctions. | Imagine you are trying to sanction a Chinese company refining Iranian oil. Sanctioning that company alone achieves little, as it receives governmental support in China and likely has few assets outside. Secondary Sanctions can be very helpful as they penalise those who provide services to the target, impairing its functioning. If the Chinese company in our example was working with HSBC, America could restrict all its banks from working with the target company. Used too aggressively, however, secondary sanctions risk accelerating rival infrastructure—consider the push for a SWIFT alternative after Russia was cut off following the Ukraine war. |
