In a radical departure from its predecessor’s practice, the Bush administration has been gung-ho about imposing proliferation sanctions, levying penalties against foreign companies and individuals 34 times in 2002 and 21 times so far this year.
The rate at which the Bush administration is imposing sanctions is three times greater than that of the Clinton administration, which averaged eight sanctions per year, according to June congressional testimony by Undersecretary of State for Arms Control and International Security John Bolton.
The change has less to do with changes in the underlying U.S. laws authorizing sanctions than a change in philosophy. Of the laws cited in the administration’s sanctions announcements, with the notable exception of the Iran Nonproliferation Act of 2000, most were also in effect during much of the Clinton administration’s two terms.
Top Bush administration officials are confident that imposing sanctions can change the cost/benefit analysis of potential proliferators and deter future proliferation. The administration repeatedly warns that countries can do business with the United States or with rogue regimes and terrorists, but not both. But skeptics, including some former top Clinton administration officials, contend that, although the threat of sanctions can be a useful lever to try and change behavior, actually imposing sanctions can have limited utility and be merely symbolic.
The Bush Administration and Sanctions
The driving force behind the policy shift is Bolton, a former senior vice president of the conservative American Enterprise Institute who advocates an in-your-face approach to dealing with rogue regimes. The undersecretary has pushed the State Department to impose sanctions to the fullest extent and has discouraged using legal provisions that allow the president to waive sanctions out of concern for broader national security interests.
In the past, and still to some degree today, various U.S. government entities have been reluctant to impose sanctions because they are generally acknowledged to be a double-edged sword. The State Department, which puts a premium on fostering good relations with foreign governments, has concerns about imposing sanctions for fear of upsetting other capitals, while the intelligence community is cautious about potentially exposing U.S. sources and methods critical to tracking proliferation. Backed by U.S. businesses worried about losing trade opportunities, the Commerce Department has generally opposed sanctions.
The Bush administration is proud of its aggressive sanctions style. Bolton noted in June that “for the first time, the State Department is reviewing every known transfer to Iran” to identify items that could aid Tehran’s pursuit of weapons of mass destruction or missiles.
Since taking office, the Bush administration has imposed sanctions on a total of 32 foreign entities—a term for both companies and individuals. The United States has penalized 18 of those entities multiple times since January 2001. A North Korean firm, Changgwang Sinyong Corporation, ranks as the top sanctions recipient with seven, the latest publicly announced July 25.
Chinese entities appear most frequently on the sanctioned roster. Of the 32 entities, 19 are Chinese. Indian and Moldovan entities are the next most numerous at three apiece. Two Armenian, two Pakistani, one Iranian, one Jordanian, and the Changgwang Sinyong Corporation account for the others. No entities from Russia, which is frequently cited in U.S. intelligence reports as a proliferation source, have been publicly penalized.
U.S. proliferation sanctions generally prohibit the charged entity from signing contracts, receiving aid, or importing arms and dual-use goods from the U.S. government for two years. Sometimes, the penalties can be imposed for longer periods, such as the July 30 announcement that the China Precision Machinery Import/Export Corporation would be sanctioned indefinitely.
Washington may also authorize stiffer sanctions barring commercial imports and exports with the United States. Earlier this year, the United States slapped such sanctions on the Chinese firm China North Industries Corporation (NORINCO), which is expected to lose about $160 million annually while the sanctions are in force.
But NORINCO is an exception. Many of the sanctioned entities do not trade with the United States or receive U.S. assistance. For these reasons, sanction critics assert that sanctions are often ineffectual and provide more psychological satisfaction than practical results.
Bush administration officials disagree. They claim that, even though the United States might do little business with sanctioned entities, the aim is to shame governments to better regulate their trade and brand proliferators as bad actors to discourage any business with them and to serve as warnings to others. Moreover, the officials argue that there has to be some penalty for proliferation to show that the United States is serious about stopping it.
Although administration officials say their sanctions are starting to have an impact, they would not cite specific examples. A senior State Department official interviewed August 25 said that it would take some time before results become evident but also remarked that this administration’s high number of sanctions point to the failure of its predecessor’s approach. This administration is “trying to see what happens when you impose sanctions and leave them in place,” the official stated.
The Clinton Approach
The Clinton administration preferred a more diplomatic approach. It often issued demarches—formal diplomatic notes—to notify foreign governments of activities by its entities that Washington wanted stopped. Sanctions were viewed as an option if demarches and diplomacy did not prove fruitful.
A current State Department official interviewed August 1 described the demarche approach as flawed because demarches reveal more information than sanctions announcements. Proliferators, according to the official, used demarches to better hide their dangerous dealings.
Noting that the intelligence community must approve all demarches, John Holum, Bolton’s predecessor in the Clinton administration, defended demarches August 22. He explained that foreign governments would not know what behavior the United States wanted changed without some details. Holum further stated that the U.S. objective was to change future behavior, not merely to punish offenders.
Bush administration officials say they still use demarches but more selectively than before. Washington might send demarches, rather than immediately applying sanctions, to governments that Washington considers close allies or that have demonstrated histories of responding to or acting upon past demarches.
China Under Scrutiny
No one country better reflects the two administrations’ contrasting styles than China. Between May 21, 1997, and the end of the Clinton administration, no new sanctions were imposed on Chinese entities.
During that period, the Clinton administration’s China policy was often at the center of a political firestorm over the direction of U.S.-Chinese relations. The Clinton administration was trying to negotiate China’s accession to the World Trade Organization against strong opposition from diverse quarters, including those who objected to Beijing’s human rights record and others who saw China as a growing threat to U.S. security. This latter constituency was bolstered by high-profile charges of Chinese nuclear espionage and illegal U.S. business assistance to China’s missile programs.
With regard to nonproliferation issues, Holum said the Clinton administration committed itself to improving the Chinese government’s export controls through intensive talks rather than punishing Chinese entities with sanctions and risking a decline in Chinese cooperation. Although the United States did not sanction any Chinese entities, it did suspend the right of U.S. companies to launch satellites on Chinese rockets. The Clinton administration talks led to a November 2000 Chinese commitment not to export missiles or related technologies capable of delivering a nuclear warhead.
The Bush administration has taken the opposite tack. Beginning June 26, 2001, it has sanctioned Chinese entities 37 times. Paula DeSutter, assistant secretary of state for verification and compliance, said July 24 that Chinese “entities are involved in too many sensitive transfers for the problem merely to be one of imperfect enforcement.”
Robert Einhorn, former assistant secretary of state for nonproliferation in the Clinton administration, said in July that the current administration does not always explain to China why its entities are being sanctioned and what Beijing can do to avoid future penalties. “The frequent imposition of sanctions, moreover, has diluted their value as a means of influencing Chinese behavior,” he added.
In an interview with The Washington Post, Liu Jieyi, a top Chinese arms control official, echoed Einhorn, claiming that Washington does not inform China what its entities are doing wrong. Liu speculated that Chinese firms are being punished for simply exporting to Iran.
Bush administration officials argue otherwise. They claim troublesome trade from China continues, despite Beijing’s unveiling last year of new rules regulating missile and dual-use chemical and biological exports. “In dealing with the issue of China and nonproliferation, we have our work cut out for us,” DeSutter said.
Bush Record on Proliferation Sanctions
Can more flies be caught with honey or vinegar? The Bush and Clinton administrations would undoubtedly answer the question differently.
Table 1. Proliferation Sanctions Levied by the U.S. Government from 2000-2003
Table 2. Entities Receiving Proliferation Sanctions from the Bush Administration
Times Sanctions Imposed
|Changgwang Sinyong Corporation||North Korea||7|
|China Machinery and Electric Equipment Import and Export Company||China||3|
|China Precision Machinery Import/ Export Corporation||China||3|
|Jiangsu Yongli Chemicals & Technologoy Import and Export Corporation||China||3|
|Wha Cheong Tai Company||China||3|
|China Machinery and Equipment Import and Export Corporation||China||2|
|China National Machinery and Equipment Import Export Corporation||China||2|
|China North Industries Corporation, NORINCO||China||2|
|China Shipbuilding Trading Company||China||2|
|CMEC Machinery and Electric Equipment Import and Export Company||China||2|
|CMEC Machinery and Electrical Import Export Company, Ltd.||China||2|
|Shahid Hemmat Industrial Group||Iran||2|
|Hans Raj Shiv*||India||2|
|Mikhail Pavlovich Vladov*||Moldova||2|
|Zibo Chemical Equipment Plant, aka Chemet Global Ltd.||China||2|
|China Metallurgical Equipment Corp.||China||1|
|China National Aero-Technology Import and Export Corporation||China||1|
|China National Machinery and Electric Equipment Import and Export Company||China||1|
|Computer & Communications SRL||Moldova||1|
|Khan Research Laboratories||Pakistan||1|
|Liyang Chemical Equipment||China||1|
|Liyang Yunlong Chemical Equipment Group Company||China||1|
|Lizen Open Joint Stock Company||Armenia||1|
|National Development Complex||Pakistan||1|
|NEC Engineers Private, Ltd.||India||1|
|Protech Consultants Private, Ltd.||India||1|
|Taian Foreign Trade General Corp.||China||1|
|Total Number of Sanctions||61|
* Individuals personally sanctioned
Sources For Tables 1 and 2: Federal Register and conversations with State Department officials