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CONTENTS:

NEWS HIGHLIGHTS OF THE WEEK:

1. World
2. Africa
3. Americas
4. Asia Pacific
5. Europe
6. Middle East
7. South Asia
8. Cyberterrorism and Information Warfare
9. Finance
10 Human Rights
11. Law and Legal Issues
12. Transportation
13. Weapons of Mass Destruction
14. Recently Published

FEATURE ARTICLE:
Economic Sanctions

NEWS HIGHLIGHTS OF THE WEEK

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1. World

A coalition of environment and aid agencies called The Working Group on Climate Change and Development has produced a report called "Up In Smoke" that warns that global warming threatens to reverse human progress, disproportionately affecting poor countries.
http://image.guardian.co.uk/sys-files/Guardian/documents/2004/10/20/report.pdf

Transparency International has issued the "Corruption Perceptions Index 2004". Finland, New Zealand, Denmark, Iceland and Singapore lead the list of least corrupt in of the 146 countries surveyed. Haiti and Bangladesh, followed by Nigeria, Burma and Chad are perceived as most corrupt. The report points to oil wealth as a potent breeding ground for corruption.
http://www.transparency.org

The new Executive Director of the Counter-Terrorism Secretariat, Javier Ruperez, outlined a comprehensive plan for UN counterterrorism efforts to the UN Security Council. They will work with Member States to identify and address the problems they face in carrying out obligations under resolution 1373. They will expand capacity, including enhanced cooperation with the Al-Qaida/Taliban Sanctions Committee, continue strategic plans to revitalize the Committee's work, including the new Counter-Terrorism Executive Directorate, and develop its next three month work plan.
http://www0.un.org/apps/news/story.asp?NewsID=12276&Cr=terror&Cr1=
(Links to video of the full day meeting)

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2. Africa

The African Development Forum 2004 focused on "Governance for a Progressing Africa".
http://www.uneca.org/adf/

Cameroon and Nigeria met to discuss the handover of the oil-rich Bakassi Peninsula under the UN-mediated border agreement. Nigeria has postponed the move for "technical reasons" but the effort is now deadlocked.

Democratic Republic of Congo's army regained control of the mining town of Kilwa from an unidentified armed group that seized it last week. Local residents captured the leader, Alain Ilunga Mukalyi, who is being treated for injuries received during the battle for the town.

Eritrea issued the following statement on October 20:

Morocco’s campaign against suspected Islamist militants is undermining the significant human rights progress the country has made in recent years, Human Rights Watch said in "Human Rights at a Crossroads". The new report cites the role of counterterrorism legislation and consequent detentions and use of torture.
http://www.hrw.org/english/docs/2004/10/21/morocc9522.htm

Republic of Congo suspended railway service between Brazzaville and Pointe-Noire due to escalating rebel attacks, variously attributed to ninjas or the National Resistance Council (Conseil national de resistance, CNR).

Somalia's new president, Abdullahi Yusuf Ahmed, has appealed to the African Union for 20,000 peacekeepers to undertake disarmament and ensure security. Somalia has had no central government since 1991 when it devolved into fiefdoms ruled by warlords and has faced continuous militia fighting.

In Sudan's Darfur region, the death toll now exceeds 70,000, with a mortality rate for internally displaced persons as high as 2.6 per 10,000 per day. In addition to other attacks, violence against women continues with impunity and raises fears for the further spread of HIV/AIDS. The African Union has offered additional troops that will be deployed within a month under a broad protection mandate.

Uganda's conflict in the north against the Lord's Resistance Army was called the world's largest neglected humanitarian emergency. Jan Egeland, a UN relief official, asked "Where else in the world have there been 20,000 kidnapped children? Where else in the world have 90 percent of the population in large districts been displaced? Where else in the world do children make up 80 percent of the terrorist insurgency movement"?
http://www.un.org/apps/news/story.asp?NewsID=12297&Cr=uganda&Cr1=

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3. Americas

The Caribbean Community (Caricom) and the UK signed a security cooperation agreement to better coordinate drug trafficking and anti-money laundering efforts.

In Haiti, increasing violence is threatening food aid and forced the International Monetary Fund (IMF) to delay a visit regarding an emergency loan. Since September 30 more than 50 people have been killed, and there are high levels of gang violence, including beatings, kidnapping, violence against women and murder.

US detainees at Guantanamo made some legal progress this week. A US district judge has ruled that suspects must be allowed to meet privately with their lawyers. Previously, the government insisted on maintaining recordings and reviewing lawyers' notes. The Office of Military Commissions has granted three of the five defense counsel challenges (based on potential bias) to military commission panel members, reducing the size of the commission to three. Meanwhile, the Pentagon reports that some ten former detainees have returned to fighting coalition and US forces in Afghanistan and Pakistan.

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4. Asia Pacific

Australia is introducing tough new anti-terrorism laws including fast-tracked bills to increase surveillance powers, allow secret "sneak and peek" searches and secret courts, and permit the detention and strip-searching of children as young as 12.

Burma's military junta has removed Prime Minister Khin Nyunt from power. The relative moderate was ousted in a power struggle, arrested on corruption charges, and replaced by hard-liner Lieutenant General Soe Win. Army intelligence was also purged. This blow to reformation raised fears for the security of democracy activist Aung San Suu Kyi. This action may also jeopardize relations with ethnic minorities. Peace talks with the Karen National Union (KNU) rebel group were cut short.

Cambodia could become a breeding ground for terrorism was the warning from the chair of the UN committee on sanctions against al Qaeda and the Taliban. He pointed to a visit by Hambali of Jemaah Islamiah (JI) as a warning and emphasized the need for international cooperation to counter this threat.

In Indonesia, Muslim militants attacked a cafe in Jakarta for serving beer during Ramadan and attacked several pig farms in central Sulawesi province. Other violence in West Sulawesi killed two people and arson attacks continue.

Laos is preparing for the Association of South East Asian Nations (ASEAN) meeting November 29-30. The US has warned of a bomb threat against the meeting. Laos believes the concerns are unfounded.

The Philippines government conducted a comprehensive review of the strategy for dealing with its indigenous communist groups, ruling out any organizational ties between Muslim rebels and Islamic militants. In particular, peace talks with the secessionist Moro Islamic Liberation Front MILF) can continue and MILF ties to JI have been ruled out.

In southern Thailand one policeman was killed by two suspected insurgents on a motorcycle. Such attacks are occurring almost daily.

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5. Europe

The European Commission adopted four new measures for fighting terrorism including enhancing European prevention, preparedness and response to attacks; terrorist financing; prevention and consequence management; and critical infrastructure protection.
http://www.europa.eu.int/rapid/pressReleasesAction.do?reference=IP/04/1275&format=HTML&aged=0&language=EN&guiLanguage=en

In Belarus, more than a thousand people protested the referendum results that allow President Lukashenko to run for a third term. During two nights of protest, three opposition leaders and some 30 others were arrested and a number of people were injured by the riot troops. International observers have condemned the poll, highlighting numerous irregularities.

The Georgia-Abkhaz peace process is near a standstill and neither side is participating in genuine negotiations. This is the conclusion of UN Secretary General Annan in his latest progress report to the Security Council.
http://www.un.org/Docs/journal/asp/ws.asp?m=S/2004/822

In Italy a judge has ordered 17 suspected members of the Red Brigades leftist militant group to stand trial next February for crimes including murder and robbery. The government believes they have broken the revived organization and play down fears of attacks after computer forensics revealed details of detailed files on potential high-profile targets.

The Russian parliament ratified the Kyoto Protocol. This will allow the treaty to enter into force.

Russia's deputy prosecutor general reported that tests on the Beslan hostage takers bodies showed that 22 of 32 were drug addicts under the influence of narcotics during the siege, and suggested the degree of brutality could have been made worse if the addicts were low on supplies. In the north Caucasus two gunmen assassinated Deputy Prime Minister Ansar Tipuyev of Karachayevo-Cherkessia. The Chechen Interior Ministry reports that more than 100 militants have been detained in special operations so far this year while another 50 were killed and 98 have surrendered.

Human Rights Watch reports that "Hundreds of thousands of new recruits face grossly abusive treatment at the hands of senior conscripts throughout their first year of service in the Russian armed forces" in their new report, "The Wrongs of Passage".
http://www.hrw.org/english/docs/2004/10/20/russia9525.htm

Spanish television aired a security-camera video taken at Atocha station at the time of the March 11 train bombings. Spanish police arrested eight suspected Islamic militants believed to be plotting an attack against the High Court in Madrid. During the investigation they uncovered possible ties to people in Australia that are being investigated by the Australian Federal Police.

The British consulate in Istanbul, Turkey, will be reopened later this week, nearly a year after it was damaged in a suicide bomb attack which killed 14.

In Northern Ireland, a taxi firm owned by a prominent loyalist had been closed following threats from the Ulster Defense Association (UDA), but after talks are now reopening.

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6. Middle East

In his monthly Middle East briefing to the UN Security Council, Kieran Prendergast warned that "there is a palpable sense of drift and foreboding, [and] neither side is fulfilling its obligations under the Road Map". Instead, "violence, not negotiation, continues to be the all too frequent mode of communication". Since the intifada started in September 2000, some 3,839 Palestinians and 979 Israelis had been killed; 36,000 Palestinians and 6,297 Israelis wounded. Vigorous international engagement is vital to prevent a drift into chaos.
http://www.un.org/apps/news/story.asp?NewsID=12308&Cr=palestin&Cr1=

In Gaza six Palestinian militants were killed in several incidents on Monday. On Thursday two Air Force drone missiles struck a vehicle and killed Hamas military commander Adnan al-Ghoul and his deputy Imad Abas. Two others were injured in the strike, which drew promises of revenge and a funeral thronged with thousands of supporters. Also on Thursday an explosive device killed one soldier. On Friday a Hamas activist was killed and a second critically wounded by Israeli tank fire while they worked on mortar shells. Early this morning as Palestinians made their way to mosque for morning prayers during Ramadan, two Islamic Jihad militants were killed in another missile strike. A third was critically wounded, and four civilians were also injured.

Iraqis in the northeast this morning found a group of new army recruits, unarmed and wearing civilian clothes, shot dead and laid out in four rows of at least twelve bodies each. They were executed in an ambush by a force that has been described as large and well organized with good intelligence. This description is consistent with a new US study showing that Iraqi resistance forces are larger and have greater financial resources than previously believed. Previous estimates ranged from a low of 2,000 to a maximum of 7,000. The new estimates say that the fighters number between 8,000 and 12,000, and that when active sympathizers or covert accomplices are added the number exceeds 20,000. They are said to be organized in some 50 militant cells with unlimited financial resources provided by former Baath leaders, Saddam Hussein's relatives, wealthy Saudi donors and Islamic charities. Meanwhile kidnappings continue, including the shocking abduction of Margaret Hassan, the local director of CARE International, who is married to an Iraqi and is a well-known and respected 30-year resident. Militant attacks and US-led offensives also continue. The UN says that elections in January are still "technically possible". Fiji has agreed to provide a security detail for UN officials that will be equipped by Australia. The International Monetary Fund projects that Iraq's economy will grow by more than 50 percent his year.

Israel's cabinet approved a bill to compensate settlers for leaving Gaza and punishing those who refuse to leave. Prime Minister Sharon's plan to withdraw from all 21 settlements in Gaza and from four of 120 in the West Bank has been highly controversial and reportedly increased the risk of his assassination by right-wing extremists. Parliament is due to vote on the withdrawal plan on Tuesday.

Lebanese Prime Minister Rafiq Hariri and his cabinet have resigned after declining to form a new government that would be under pressure over Syria's involvement. The resignation was a shock since Hariri, who has close ties to Syria, had led the country for most of the time since the civil war ended in 1990. Omar Karameh was named the new Prime Minister. He also has close ties to Syria.

In the West Bank the Al-Aqsa Martyrs Brigades killed an Israeli soldier in a drive-by shooting.

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7. South Asia

In Afghanistan, preliminary election results indicate interim president Hamid Karzai has won the simple majority necessary to avoid a run-off. Final results will be announced only after all ballots are counted and investigation into irregularities completed. Preparations for the parliamentary, provincial and district elections scheduled for next spring must begin immediately.

In Kabul, a Taliban suicide bomber killed himself and two people: a US translator and an 11-year-old Afghan girl. Earlier in the week an explosion hit a vehicle used by election staff, killing five. A UN-backed program of disarmament, demobilization and reintegration has just been funded and is designed to provide financial support to commanders who surrender their military units.

Indian police in the southern state of Tamil Nadu have shot dead the legendary bandit Veerappan, one of the most wanted men in the country with a 50 million rupee ($1.1 million) reward on his head. Three associates were also killed. Veerappan has been wanted for more than 20 years. He is accused of more than a hundred murders as well as kidnapping, smuggling, and poaching - including 2,000 elephants. The search for his hidden riches is underway, and his known family assets have been frozen.

In Andhra Pradesh state, the Communist Party of India (Maoist) held peace talks that ended with no agreement. It was the first time the rebels had left their jungle hideouts and expectations had been much higher. In the end, the government did not agree to rebel demands regarding land distribution and dropping charges against some members of the movement. In addition, the rebels refuse to work in the framework of a constitution they believe is illegal and unbinding, but the government restated an earlier position that discussions must be within the constitutional framework.

Separatist rebels of the National Liberation Front of Tripura (NLFT) in the northeastern state of Tripura killed four Bengali settlers and injured six. Also in the northeast, the central government says it is willing to participate in talks with Assam state and separatist rebels of the National Democratic Front of Bodoland to help end the violence.

In Indian-administered Kashmir, suspected Islamic militants shot dead former state minister Safdar Baig.

Pakistan continued operations in Waziristan, clashing repeatedly with Islamic militants in the south. They are now beginning house-to-house searches for local and foreign fighters.

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8. Cyberterrorism and Information Warfare

Accounting firm RSM Robson Rhodes reports that UK businesses lost more than GPB 40 billion last year as the result of economic crimes including identity theft, embezzlement, bribery and corruption, check and credit card fraud, internet and cyber crime, insurance fraud, money laundering, procurement fraud, counterfeiting, and VAT fraud.
http://www.rsmi.co.uk

CipherTrust reports that less than five zombie networks are responsible for all worldwide phishing attacks.
http://www.ciphertrust.com/company/press_and_events/article.html?id=0000371&sp=1&cs=51

Microsoft Internet Explorer has two new highly critical vulnerabilities connected to zone restriction errors affecting even fully patched systems.
http://secunia.com/advisories/12889/
A dialog box vulnerability that permits spoofing affects multiple browsers and presents moderate risk.
http://secunia.com/

The British Home Office has been testing face recognition technology they plan to use in new biometric passports but a new study shows the technology has a failure rate of ten percent.

The US Federal bureau of Investigations is examining an incident in which the University of California Berkeley computer system may have given a hacker access to personal information including social security numbers of 1.4 million Californians who participated in a state social service program.

Brazilian police have arrested more than 50 people in four states who allegedly stole some $30 million through internet fraud using a virus to store details of internet bank accounts.

In Hong Kong, twelve people have been arrested in connection with a phishing scheme against customers of HSBC in which twelve customers were affected.

Diebold electronic voting systems being used in the US elections are reported to still be running on Windows NT 4 operating system that was discontinued in 2001.

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9. Finance

A new report, "Deja Vu" presents the results of Global Witness and Amnesty International's survey into the diamond jewelry retail sector's implementation of self-regulation to support the Kimberley Process. They find that the industry has failed to deliver on its promises of the international diamond certification scheme that was launched to combat the trade in conflict diamonds.
http://www.globalwitness.org/

The European Commission adopted today a Communication on Prevention of and the Fight against Terrorist Financing. It focuses on enhancing information exchange and facilitating co-operation and exchange structures.
http://www.europa.eu.int/rapid/pressReleasesAction.do?reference=IP/04/1276&format=HTML&aged=0&language=EN&guiLanguage=en

Glenn Simpson of the Wall Street Journal reports on "Easy Money: Expanding in an Age of Terror, Western Union Faces Scrutiny: As Fund-Transfer System Grows in Risky Parts of the World, U.S. Questions Oversight: How 9/11 Hijackers Got Paid" in the October 20 issue.
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2004/10/20/financial0927EDT0058.DTL

Interpol's second Anti-Counterfeiting Congress warned of the use of counterfeiting by organized criminal and terrorist groups, announced an intellectual property enforcement operation in South America, and described progress in model legislation.

Bank accounts held by the British National Party (BNP) at HSBC will be closed. Barclays froze accounts of the far-right group earlier this year.

Northern Ireland's Assets Recovery Agency has secured High Court orders to freeze assets against three members of one family: Albert, Jessica and Paul Baxter and the limited companies in which they were involved, including Kanash, Global Christmas, Cedar Hill Trading and Global Fireworks. They are alleged to be in cigarette smuggling, selling counterfeit goods and illegally importing Chinese fireworks for gains of more than GBP300,000.

Liberia's Supreme Court ordered economic sanctions imposed against Emmanuel Shaw and Benoni Urey, who have connections for former President Charles Taylor, to be suspended because only judges, not the government minister who took the action, has the power to issue such instructions.

In an IRIN interview Charles Goredema of the Institute for Security Studies (ISS) said that Southern African countries need to outlaw money laundering that costs their economies billions of dollars each year.
http://www.irinnews.org/report.asp?ReportID=43758

US Treasury Secretary Snow issued a statement on charitable giving during Ramadan that warns of the risk of contributions being diverted to terrorism and cites US guidance on the subject.
http://www.treas.gov/press/releases/js2041.htm
http://www.treas.gov/press/releases/docs/tocc.pdf
The Council on Foundations that represents more than 2,000 groups plans to push reconsideration of these guidelines.

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10. Human Rights

The UN special representative on human rights defenders reported to the Security Council that "No restrictions should be imposed on the types of activities that human rights defenders carry out in the defence of human rights, providing they respect the principle of transparency and non-violence".
http://www.un.org/Docs/journal/asp/ws.asp?m=A/59/401
http://www.un.org/apps/news/story.asp?NewsID=12303&Cr=human&Cr1=rights

The Institute of Electrical and Electronic Engineers (IEEE) has restored most of the free services, including email, that it had withdrawn from members living in Cuba, Iran, and Sudan in January 2002 for fear it would violate US trade embargoes.

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11. Law and Legal Issues

Aldurahman M. Alamoudi, a leading advocate for American Muslims, was sentenced in US federal court to 276 months (23 years) prison and forfeiture of more than $900,000 in connection with terrorist financing. He pleaded guilty to violating terrorism-related sanctions prohibiting unlicensed travel to and commerce with Libya; false statements in his naturalization application; and a tax offense in concealing financial transactions with Libya and foreign bank accounts and omitting information from tax returns filed by his charities.
http://www.usdoj.gov/opa/pr/2004/October/04_crm_698.htm

Syed Irfan Ali was arrested in Pakistan in connection with the car bomb in Multan this month that killed 40.

Major Hamza al-Mustapha and three associates have been charged with plotting to assassinate Nigerian President Obasanjo by downing his plane and planning a coup.

Ahmed Hassan Al-Uqaily was arrested in Nashville, Tennessee, US, of illegally possessing machine guns and ammunition. He allegedly spoke of "going jihad".
http://www.usdoj.gov/opa/pr/2004/October/04_crm_691.htm

Rafael Calderon is the second former president of Costa Rica to face fraud charges. He has denied charges of illegal enrichment in the purchase of large medical equipment contract.

Muslim cleric Abu Hamza al-Masri has been charged with 10 solicitations to murder, four charges related to inciting racial hatred, and one charge under section 58 of the Terrorism Act of possessing a document which contained information likely to be useful to a preparing or committing an act of terrorism".

Abdul Menap Mentang, Monawara Usop and Murside Mubpon were arrested in the Philippines in connection with bombings at an airport and ferry port last year that killed 38. Philippine police say they have confessed, but they have not yet been charged.

Jimmy Matutte Palma of the United Self-Defense Forces of Colombia (AUC) paramilitary group has been sentenced to 32 years prison for the 1999 murders of a Spanish aid worker and a Colombian priest and of belonging to an illegal armed group.

Michael Gerard Rogan was extradited from Tenerife to Northern Ireland, where he has been charged with causing explosions at Thiepval Barracks in Lisburn in 1996 and with collecting information about prison officers and the security forces useful to terrorists. He pleaded not guilty.

Adolfo Toledo ("Dollar"), a Revolutionary Armed Forces of Colombia (FARC) rebel, was arrested in Colombia in connection with a November 2003 hand grenade attack against a pub frequented by Americans. One person was killed and dozens injured.

Risaldar Mosleh Uddin, Dafadar Marafat Ali Shah and Dafadar Abul Hasem Mridha were sentenced to death in Bangladesh court for killing four aides of assassinated president Sheikh Mujibur Rahman in 1975. Twelve other officers were given life sentences and five were acquitted. Al but three were sentenced in absentia.

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12. Transportation

The US Transportation Security Administration (TSA) has begun security threat assessments of non-US citizens seeking training at US flight schools. Schools must submit a photograph and $130 fee for the TSA assessment.
http://www.tsa.gov/public/display?theme=44&content=09000519800d8df4

The UN Office on Drugs and Crime (UNODC) with the World Customs Organization (WCO) has launched the Container Control Programme. It is intended to support port control measures in developing countries, bringing together new teams of customs officials and police, and providing them with training and equipment to target illicit trafficking via maritime freight containers. The first phase will begin at the ports of Guayaquil, Ecuador, and Dakar, Senegal and should expand to Pakistan and Ghana next year.
http://www.unodc.org/unodc/index.html

The British ports of the ports of Liverpool, Southampton, Thamesport, and Tilbury have agreed to implement the US Container Security initiative (CSI).
http://www.cbp.gov/xp/cgov/newsroom/press_releases/10192004.xml

In Australia an inquiry into putting a third container terminal at Port Botany near Sydney Airport is underway. Security is a major concern. A submission from the Planning Institute of Australia suggests such a concentration of facilities could present an attractive target.
http://www.coi.nsw.gov.au/inquiry/view.php?InqId=93

The US Bureau of Customs and Border Protection begins enforcing visa waiver program applicants possess a machine-readable passport on October 26.
http://www.dhs.gov/dhspublic/display?content=4075

Long N. Lee and Acey R. Johnson, a married couple formerly employed by the US State Department, were sentenced to 60- and 63-month prison terms, respectively, in connection with a bribes-for-visas fraud conducted in Sri Lanka, Fiji and Vietnam.
http://www.usdoj.gov/opa/pr/2004/October/04_crm_715.htm

The Visa Fraud Unit of Ghana's Police Service has arrested at least 16 Ghanaians who submitted fraudulent documents in visa applicants to the US Consulate.

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13. Weapons of Mass Destruction

Brazil has agreed to inspections by International Atomic Energy Agency (IAEA) staff involving greater but still restricted access.

China has agreed to implement the Convention on Nuclear Safety.

Iran is still reviewing a European offer of trade concessions and nuclear technology in exchange for suspension of uranium enrichment but the initial response called the proposal unbalanced.

The European Organization for Nuclear Research (CERN) celebrated 50 years of work in particle physics.

IAEA has warned that its 1970s-era computer system is no longer able to meet the needs of its inspectors.

There have been more avian influenza outbreaks in Vietnam. The disease infected more than 50 tigers in a Thai zoo. Infected by eating raw chicken, they died of the disease or were killed when symptoms emerged, and more are at risk. In Belgium, a man smuggling birds from Thailand was stopped at the airport and detained. Two infected Asian eagles were destroyed.

Cambridge Biostability has developed a new process to store cells in a dried condition that could eliminate the need for refrigeration.

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14. Recently Published

James Carroll, "Crusade: Chronicles of an Unjust War" Metropolitan

Madelaine Drohan, "Making a Killing: How and Why Corporations Use Armed Forces to Do Business" Lyons

Joshua S. Goldstein, "The Real Price of War: How You Pay for the War on Terror" New York University

Radovan Karadzic, "Miraculous Chronicle of the Night" (romantic novel) published by an associate in Belgrade
http://news.independent.co.uk/europe/story.jsp?story=573568

Sanford Levinson, editor, "Torture: A Collection" Oxford University press

Irene Nemirovsky, "Suite Francaise" (novel) Denoel
http://www.guardian.co.uk/international/story/0,,1334150,00.html

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FEATURE ARTICLE: Economic Sanctions

Chapter seven of the UN charter allows the Security Council to take enforcement measures ranging from economic sanctions to military force and represent a range of options also open to each state. In fact, economic and other sanctions are often a useful way to coordinate international efforts, directed toward a particular threat or crisis situation. Sanctions also offer strategic guidance for foreign policies related to export, import, licensing, and similar commercial issues. One of the best-known sanctions mechanisms is to list entities to freeze assets and prohibit business. This is the function, for example, of the US Treasury's Office of Foreign Assets Control (OFAC) and Commerce Department's Bureau of Industry and Security (BIS).

Just in the US, OFAC's sanctions directed against countries and multi-country programs include a variety of actions against the Balkans, Burma, Cuba, Diamond Trading, Iran, Iraq, Liberia, Libya, Narcotics Trafficking, Nonproliferation, North Korea, Sudan, Syria, Terrorists, and Zimbabwe. Internationally, millions of people feel the impact of these sanctions programs.

Given their wide range and broad impact, it is important to understand whether sanctions are important -- or harmful. For example, in Angola sanctions against UNITA rebels were unable to stop a horrific civil war, whereas in Saddam Hussein's Iraq, sanctions were continued for more than a dozen years despite the fact that they enriched the regime while creating a humanitarian crisis among the general population. Even today, it is difficult to see whether there is any benefit to the current approach to sanctions against al Qaeda and the Taliban.

This question of economic sanction efficacy was first formally raised in UN Secretary General Kofi Annan's first report to the General Assembly. He said:

Following this, an effort to develop "smart sanctions" began with meetings in Interlaken, Switzerland, that culminated in "Targeted Financial Sanctions - A Manual for Design and Implementation" based on the proceedings over the course of two international working sessions. The manual reviews the goals and legal framework as well as best practices in implementation and enforcement. For example, best practices in targeted financial sanctions includes:

Even these simple steps are not yet commonplace, as evidenced in recent reports from the UN Sanctions Monitoring Committee and other world bodies, including the International Monetary Fund (IMF) and the World Bank. However, even where public policy supports these directions, operational and legal/regulatory issues continue to present significant challenges.

For example, the UN monitoring committee tasked with supervision of sanctions against al Qaeda and the Taliban cites issues ranging from the limited cooperation provided by reporting countries to basic lack of reliable spelling of the names of individuals or groups that have been sanctioned. The US Government Accountability Office (GAO) recently described three of the leading challenges facing the US agencies tasked with sanctions-related activities:

First, basic information needed to locate and freeze financial assets is not always readily available. For instance, the spelling of names, addresses, and dates of birth are often incomplete, inaccurate, or unavailable. Consequently, a financial institution, airline or other organization that is checking names against a government list may be unable to determine whether or not there is a match. This leads to a high degree of false positives that require further, often manual, investigation or, in the absence of verifiable information, blocking a transaction or reporting the case to law enforcement. New customer identification rules require banks to verify this information for new accounts, but that provides limited mitigation of the problem. More than 3,500 names are on the OFAC list. Few if any of these are likely to have opened a US bank account since June 9, 2003, when the customer ID rules came into effect. Furthermore, not every entity subject to sanctions is on a government list, causing further complications.

Second, in cases where the US has imposed unilateral sanctions, some countries prohibit freezing and transferring assets that are located in US financial institutions overseas. Even in cases where the sanctions are multinational and require international compliance, local laws and regulations may conflict, and limit the range of actions that can be undertaken.

Third, OFAC has limited ability to monitor compliance. Its primary method to identify violations is through reports that are sent by financial institutions. Although this reporting is mandatory and under federal supervision, it cannot readily identify every possible regulatory violation or operational deficiency. Proactive monitoring is not allowed under current bank secrecy and information sharing rules.

None of these issues are insurmountable, but they do require international cooperation and good governance that is not commonly found. The UN's counterterrorism committee has launched a new effort to put commitment and resources behind the lofty goals. With transparent motives, operations, and monitoring, economic sanctions may become a highly effective tactic, not just a superficial reprimand.

Further Reading:

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