The Enforcement of U.S. Economic Sanctions and Global De-risking Behavior

Bryan R. Early and Timothy M. Peterson

Journal of Conflict Resolution, 2024, vol. 68, issue 10, 2048-2075

Abstract: Evidence suggests that firms frequently over-comply with U.S. sanctions—a process also known as “de-risking.†We argue that U.S. enforcement of its economic sanctions has contributed to this phenomenon to the extent that we can observe a systematic relationship between U.S. sanctions enforcement and third-party trade with U.S. sanction targets. Specifically, we theorize that, the greater the frequency and severity of sanctions enforcement penalties imposed by the U.S. against sanctions violators, the more third-party trade with U.S. sanction targets will decline. Analyzing data from 2003 to 2015, we find that U.S. sanctions enforcement actions correlate with significant declines in dyadic trade between third-party states and U.S. sanctions targets, even when enforcement actions target parties external to that dyad. This suggests that the U.S.’s enforcement of its sanctions magnifies the harm that U.S. sanctions inflict on target economies.

Keywords: economic sanctions; sanctions enforcement; OFAC; de-risking; foreign policy; trade (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/00220027231214748 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:jocore:v:68:y:2024:i:10:p:2048-2075

DOI: 10.1177/00220027231214748

Access Statistics for this article

More articles in Journal of Conflict Resolution from Peace Science Society (International)
Bibliographic data for series maintained by SAGE Publications ().