The Russian invasion of Ukraine in 2022 led to the imposition of an unprecedented range of sanctions against Russia and Russian companies and individuals - export and import embargoes, access to the international financial system largely cut off, and members of the elite hit with visa bans and asset freezes. Use of the previously little-known term “secondary sanctions” has become commonplace, and lobby groups and Western politicians now routinely call for the imposition of sanctions for things of which they disapprove. Both Azerbaijan and Georgia have been targeted in the past year, as have companies from other states in the South Caucasus and Central Asia. However, the question as to whether and when sanctions are an appropriate response needs to be addressed.
The South Caucasus does, of course, already have experience of sanctions. The Nagorno-Karabakh arms embargo is one of the longest running arms embargoes: agreed by the OSCE in 1992, it called on participating states to impose an embargo on “all deliveries of weapons and munitions to forces engaged in combat in the Nagorno Karabakh area.”
In truth, however, it has long been clear that the embargo was not being universally applied. While Western countries generally respected it, Russia in particular paid no heed, supplying both Armenia and Azerbaijan at volume. And in recent years it has frayed even more: Türkiye has supplied Azerbaijan, and France is selling weapons to Armenia. Additionally, an OSCE embargo doesn’t cover non-OSCE states, with Azerbaijan buying weapons from Israel and Pakistan, and Armenia from India.
Hence non-adherence by one OSCE state in particular and the lack of universality means that the OSCE embargo failed both in stopping the supply of military equipment to the countries, as well as - its primary purpose - preventing further conflict.
More recently, individuals in both Azerbaijan and Georgia have been hit with - or threatened with - sanctions. The European Parliament voted for targeted sanctions against Azerbaijani officials last October (following military action in Nagorno Karabakh) and this April (on the basis of human rights violations), while some U.S. members of Congress submitted a proposal in April for sanctions in response to a range of alleged human rights violations, including the imprisonment of Armenian prisoners and claims of ethnic cleansing in Nagorno Karabakh.
While these are proposals by legislators rather than actual sanctions, the U.S. government itself implemented “mini-sanctions” on Azerbaijan by announcing last November the cancellation of high-level engagement in response to the events in Karabakh and has imposed visa sanctions on dozens of Georgians following the passing of a “foreign agents” law (which - it is feared - will be used as a vehicle to control NGOs). Both the United States and the EU have suspended some aid to Georgia, and the EU has reportedly halted the process of considering Georgia’s request for EU candidate status.
All this raises questions as to why sanctions are becoming an increasingly common tool for Western countries, whether they are effective, and - if not - what is their purpose?
There is an argument that economic sanctions against Iran - and in particular the removal of Iranian banks from the international clearing system - did provoke an economic crash, the election of President Rouhani, and the nuclear deal. But those against Cuba and Venezuela have not led to the fall of the regime or policy change in either country. And, despite the widest range of sanctions ever, Russia continues to wage an illegal war in Ukraine.
It’s worth taking a look at the different types of sanctions. Firstly, there’s an embargo, which can be a broad, crude tool of the sort used against Cuba and North Korea, or a more specific one, targeting particular goods (e.g. electronic chips to China). Then there are financial sanctions against a country, aimed at shutting down cash supply lines via asset freezes or removing access to the global banking system. And, finally, there are individual sanctions, either against companies or specific people.
In all cases, the aim is to inflict pain on the population, government, companies, or individuals in the hope of forcing the regime to change its policies, or even to bring about regime change. In the case of Russia, a key aim is to degrade Russia’s ability to wage war, giving Ukraine more time and opportunity to resist and fight back.
There are a number of problems, however, that can reduce the effectiveness of sanctions or lead to unintended consequences.
Circumvention: As with the Nagorno Karabakh arms embargo, the sanctions might not command universal support. This is true, too, in the case of sanctions against Russia, with a wide range of countries still willing to deal with Russia. This, in turn, has led to the introduction of secondary sanctions, for example against companies or banks in countries which have not themselves formally implemented Western sanctions against Russia, including Armenia, Kazakhstan, and Kyrgyzstan. Interestingly, the threat of secondary sanctions has had some effect in terms of changing the behavior of some banks and companies, many of which have stopped dealing with Russia out of fear of being blacklisted by the United States or the European Union.
Inoculation/insulation: Russia has been a good example of how an economy can adapt to sanctions by switching to the manufacture of domestic replacements. China is doing likewise in response to bans on the export of high-capability chips.
Backlash: Sanctions can often generate anti-foreigner resentment among the general population and increase support for the regime. This has led to a search in the West for targeted “scalpel-like” sanctions in order to avoid hitting the general population, but, nevertheless, regimes targeted can be skillful in portraying the sanctions as an attack on the country. Many in Azerbaijan claim Western hypocrisy in talking of sanctions against Azerbaijan while having tolerated Armenian control of Azerbaijani territory for almost 30 years. In Georgia, many of those opposed to the new law do support the imposition of sanctions against members of the government and the ruling Georgian Dream party, but it will be worth watching if/how Georgian Dream manages to use the sanctions issue in its approach to elections in October.
Damaging your own interests: Last November, the U.S. Senate adopted a bill that would suspend all military aid to Azerbaijan by repealing the Freedom Support Act Section 907 waiver authority for the Administration. However, the vast majority of such assistance (which was not strictly military) was designed to strengthen Azerbaijan’s southern border with Iran against drugs smuggling, something very much in the United States’ and West’s interests.
Pushing the country into the arms of your opponents: The West has traditionally seen Georgia and Azerbaijan as bulwarks against Russian influence in the South Caucasus, but by imposing - or threatening - sanctions, they risk pushing the two countries closer to Russia. Certainly, Azerbaijan’s perception of pro-Armenian bias in the approach of the United States and the EU has led to a reduced role for the West in the peace process with Armenia, and greater Azerbaijani willingness to engage with Russia on a case-by-case basis. It is only recently that the United States has managed to regain a foothold in facilitating the peace process.
Retaliation: Azerbaijan retaliated against the U.S. cancellation of high-level engagement by pulling out of meetings in Washington aimed at supporting the U.S. role in facilitating peace talks.
So, given the evidence of the ineffectiveness or even counter-productive nature of sanctions, why are they increasingly in vogue?
As a general point, sanctions are accepted as one of several tools in the diplomatic toolbox. Lobbying, demarches, and declarations are the bread and butter of diplomats’ efforts to influence and persuade. At the other end of the spectrum lies military action, for which experiences from Afghanistan, Iraq, and Libya have reduced the appetite. Sanctions and embargoes lie somewhere in between. And, certainly, Western governments do not have a monopoly on their use, with China and Russia both regularly imposing trade sanctions on countries that incur their displeasure.
As to why sanctions appear to be increasingly in vogue, there are perhaps two main reasons. One simple answer - as alluded to above - is probably the Russian invasion of Ukraine, which raised the profile of sanctions and gave governments and legislators greater experience in implementing them and greater awareness of the range of possibilities.
The sanctions on Russia are a special and--for Ukraine and European security--an existential example in tackling an illegal invasion, part of a suite of measures to support Ukraine’s right of self-defense. Few would argue that the United States and Europe should not have taken action. But in other cases, and often due to pressure from interested lobby groups, Western politicians need to be seen to “do something”; this is particularly true for parliamentarians, who can propose and pass resolutions calling for sanctions without having to worry about the consequences. Sanctions are seen as easy, costing very little, and being comparatively risk free.
Perhaps the second, broader reason for the rise relates to the weakening of Western influence and the Western-inspired international rules-based order. The UN Security Council - the ultimate decision maker on international law - is increasingly unable to fulfil its role, and the rise of non-Western powers has provided smaller countries with alternative sources of support and inspiration. They are no longer so tightly bound into a Western-dominated system and have more freedom to chart their own course. The United States and the EU, even with the lure of NATO and EU membership, are finding they do not - at least not yet - have the ability to drive the course of the Georgian government, which has shrugged off the visa bans.
Hence, it can be argued that the increasing use of sanctions flows from a failure by the West to provide an attractive model or sufficiently compelling incentives that persuade countries to stick to a Western model of development. Even within the EU, recent European parliamentary elections have demonstrated a reaction to what might be viewed as Western European liberal dogma. In this sense, sanctions are viewed by some as an element of a “colonial” mindset, threatening instead of engaging, listening, or persuading.
Some have cited possible evidence that the threat of sanctions can play a role, arguing that the introduction of the draft bill in Congress, in which senior Azerbaijani figures were named, did play a role in the release of the academic Gubad Ibadoglu. However, there were additional arrests even after that. And even threats can lead to diminishing returns, especially if they are seen simply as gesture politics.
And while - as noted above - the threat of secondary sanctions can have an impact by persuading companies and banks to change behavior as regards dealing with Russia, that can cause resentment in countries, such as Kazakhstan, that are being forced into uncomfortable choices.
All this points to the irony of sanctions being proposed - or deployed - more frequently at exactly the time they are likely to be less effective. Hence, it is important for Western governments and lawmakers - certainly in the case of the South Caucasus - to step back and look again at their policies. What are their real strategic interests? Why are their policies not succeeding? Are they providing sufficient positive incentives to maintain influence? Do sanctions have a place - will they be effective, or will they be counterproductive?
The world has fragmented in the past decade, and the West needs to catch up. Taking countries for granted - or, worse, threatening and sanctioning them - is no longer enough.
James Sharp is a retired United Kingdom diplomat who served as Ambassador to Azerbaijan, Kazakhstan, and Kyrgyzstan.
