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Neutrality and Governance in a Weaponized World

Review products

How Sanctions Work: Iran and the Impact of Economic Warfare. By Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani & Ali Vaez. Stanford, CA: Stanford University Press, 2024. Pp. 212. Index.
The Russia Sanctions: The Economic Response to Russia's Invasion of Ukraine. By Christine Abely. Cambridge, UK: Cambridge University Press, 2023. Pp. 123. Index.
Backfire: How Sanctions Reshape the World Against U.S. Interests. By Agathe Demarais. New York: Columbia University Press, 2022. Pp. 304. Index.

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Published online by Cambridge University Press:  17 October 2024

J. Benton Heath
J. Benton Heath*
Affiliation:
Associate Professor, Temple University Beasley School of Law.
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Extract

About a decade ago, the neural network of the international financial system underwent an identity crisis. Since its establishment in 1973, the Society for Worldwide Interbank Financial Telecommunication (Swift) had become the world's dominant system for transmitting information about financial transactions, handling up to 20 million messages per day across 212 jurisdictions. The Belgium-based company reached this position by providing customers with a reliable, confidential, and global system to exchange information. “[W]e have always maintained the position that we are like the internet,” Swift chief executive officer Gottfried Leibbrandt said in an October 2012 interview, “we connect everybody and we do not listen in on the conversation.” In other words, to borrow a phrase from its website, “Swift is neutral.”

Type
Review Essay
Information
American Journal of International Law , Volume 118 , Issue 3 , July 2024 , pp. 566 - 585
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of American Society of International Law

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Footnotes

*

Thanks to Mona Ali, Julian Arato, Enzo Cannizzaro, Elena Chachko, Ben Coates, Harlan Cohen, Jeff Dunoff, Monica Hakimi, Artemy Kalinovsky, Desiree LeClercq, Scott Paul, Ntina Tzouvala, and Pierre-Hughes Verdier for helpful discussions.

References

1 Susan V. Scott & Markos Zachariadis, The Society for Worldwide Interbank Financial Telecommunication (SWIFT) 1–2 (2013).

2 Id.

3 John Beck, Sibos: SWIFT – Q&A – Gottfried Leibbrandt, The Banker (Oct. 2012).

4 Swift, Compliance: Swift and Sanctions, at https://www.swift.com/about-us/legal/compliance-0/swift-and-sanctions.

5 On Swift's cooperation in anti-terrorism efforts, see Eric Lichtblau & James Risen, Bank Data Is Sifted by U.S. in Secret to Block Terror, N.Y. Times (June 23, 2006).

6 United Against Nuclear Iran, Letter to Yawar Shah, Chairman of the Board of Directors, SWIFT (Jan. 30, 2012), available at https://www.unitedagainstnucleariran.com/sites/default/files/IBR%20Correspondence/UANI_Letter_to_SWIFT_013012.pdf.

7 Scott & Zachariadis, supra note 1, at 134–35.

8 See, e.g., Orde F. Kittrie, Lawfare: Law as a Weapon of War 148–49 (2016).

9 Beck, supra note 3.

10 Scott & Zachariadis, supra note 1, at 136.

11 Is the International Legal Order Unraveling? (David L. Sloss ed., 2022).

12 For a powerful critique of this common narrative, see Jessica Whyte, Economic Coercion and Financial War, J. Austrl. Pol. Econ., at 5, 7 (2022/2023).

13 See generally Bruce W. Jentleson, Sanctions: What Everyone Needs to Know (2022).

14 Daniel W. Drezner, Global Economic Sanctions, 27 Ann. Rev. Pol. Sci. 9 (2024).

15 See, obligatorily, Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (1944).

16 Jessica Whyte, Morals of the Market: Human Rights and the Rise of Neoliberalism (2019); Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism (2018).

17 See generally Bandung, Global History, and International Law (Luis Eslava, Michael Fakhri & Vasuki Nesiah eds., 2017); Adom Getachew, Worldmaking After Empire: The Rise and Fall of Self-Determination 142–75 (2019).

18 E.g., GA Res. 3281 (XXIX), Charter on the Economic Rights and Duties of States, Arts. 4, 14, 32 (Dec. 12, 1974).

19 See Peter Redfield, The Impossible Problem of Neutrality, in Forces of Compassion: Humanitarianism Between Ethics and Politics 53, 53–54 (Erica Bornstein & Peter Redfield 2011) (on the “generative” nature of problematic concepts).

20 See Part I infra; Neff, Stephen C., Disrupting a Delicate Balance: The Allied Blockade Policy and the Law of Maritime Neutrality during the Great War, 29 Eur. J. Int'l L. 459, 460–63 (2018)CrossRefGoogle Scholar (on ad hoc development).

21 Abi-Saab, Georges, The Newly Independent States and the Rules of International Law, 8 Howard L.J. 95, 117–18 (1962)Google Scholar.

22 See Redfield, supra note 19, at 62; J. Charles Cox, The Sanctuaries and Sanctuary Seekers of Mediaeval England 1–3 (1911).

23 Cf. Benvenisti, Eyal, Sovereigns as Trustees of Humanity: On the Accountability of States to Foreign Stakeholders, 107 AJIL 295 (2013)CrossRefGoogle Scholar.

24 See, e.g., Lim, C.L. & Martinez-Mitchell, Ryan, Neutral Rights and Collective Countermeasures for Erga Omnes Violations, 72 Int'l & Comp. L. Q. 361 (2023)CrossRefGoogle Scholar.

25 See David Adler, The West v. Russia: Why the Global South Isn't Taking Sides, Guardian (Mar. 28, 2022), at https://www.theguardian.com/commentisfree/2022/mar/10/russia-ukraine-west-global-south-sanctions-war.

26 See, e.g., Gaza: Human Rights Council Resolution Urges Arms Embargo on Israel, UN News (Apr. 5, 2024), at https://news.un.org/en/story/2024/04/1148261#.

27 See, e.g., 27 ASIL Proc. 1, 4 (1933).

28 Hyde, Charles Chaney, The Boycott as a Sanction of International Law, 27 ASIL Proc. 34 (1933)Google Scholar.

29 Id. at 37–38.

30 Id. at 38.

31 General discussion, 27 ASIL Proc. 55, 55, 63–64 (1933).

32 Id. at 61.

33 Nicholas Mulder, The Economic Weapon: The Rise of Sanctions as a Tool of Modern Warfare (2022).

34 Id. at 4.

35 Id. at 27–54.

36 Id. at 15.

37 See, e.g., Remarks of George Hale, Lake Mohonk International Arbitration Conference, Second Annual Meeting, June 1896, at 55.

38 Mulder, supra note 33, at 20.

39 Id.

40 Id. at 43, 53.

41 Id. at 5.

42 Id. at 81.

43 Id. at 81–82.

44 Mulder, supra note 33, at 2.

45 See Benjamin Allen Coates, Legalist Empire: International Law and American Foreign Relations in the Early Twentieth Century 174–75 (2016).

46 Mulder, supra note 33, at 156.

47 Id. at 170.

48 See, e.g., Marvin Zalman, Edwin Borchard's Innocence Project, 1 Wrongful Conviction L. Rev. 124, 125–29 (2020); Carl Schmitt, The Turn to the Discriminating Concept of War (1937), in Writings on War 35 (Timothy Nunan ed. & trans., 2011).

49 Mulder, supra note 33, at 169.

50 See id. at 170–71.

51 Id. at 171.

52 Id. at 288.

53 Oona A. Hathaway & Scott J. Shapiro, The Internationalists: How a Radical Plan to Outlaw War Remade the World 81–82 (2017).

54 Borchard, Edwin, The Impracticability of “Enforcing” Peace, 55 Yale L.J. 966, 971 (1946)CrossRefGoogle Scholar; see also Frantz Fanon, The Wretched of the Earth n. 128 (1961) (Richard Philcox trans., 1963).

55 Mulder, supra note 33, at 288.

56 E.g., Farrell, Henry & Newman, Abraham L., The Janus Face of the Liberal International Information Order: When Global Institutions Are Self-Undermining, 75 Int'l Org. 333, 335–36 (2021)CrossRefGoogle Scholar.

57 Wriston, Walter B., The Twilight of Sovereignty, 17 Fletcher F. World Aff. 117, 119–20, 126 (1993)Google Scholar.

58 Id.

59 Helleiner, Eric, Electronic Money: A Challenge to the Sovereign State?, 51 J. Int'l Aff. 387, 394–97 (1998)Google Scholar.

60 Henry Farrell & Abraham L. Newman, Underground Empire: How America Weaponized the World Economy (2023).

61 Id. at 17–45.

62 Id. at 5.

63 Farrell, Henry & Newman, Abraham L., Weaponized Interdependence: How Global Economic Networks Shape State Coercion, 44 Int'l Security 42 (2019)Google Scholar.

64 Farrell & Newman, supra note 60, at 76.

65 Id. at 69–72.

66 See, e.g., Pierre-Hugues Verdier, Global Banks on Trial (2020); Juan C. Zarate, Treasury's War (2013); Suzanne Katzenstein, Dollar Unilateralism, 90 Ind. L.J. 90 (2015).

67 Farrell & Newman, supra note 60, at 73.

68 See id.

69 The inclusion of this carve-out in Iran sanctions implied that U-turn transactions were prohibited in other sanctions regimes, but this prohibition was not routinely enforced until the enforcement push of 2006. Paul L. Lee, Compliance Lessons from OFAC Case Studies—Part I, 131 Banking L.J. 657, 666–67 (2012); see also Verdier, supra note 66, at 127–28.

70 Farrell & Newman, supra note 60, at 73.

71 Id.

72 See id. at 73–77.

73 Id. at 77 (quoting Christopher Hill, Outpost: A Diplomat at Work (2015)).

74 See id. at 77–78.

75 Jacob J. Lew, The Evolution of Sanctions and Lessons for the Future, Carnegie Endowment Int'l Peace (Mar. 30, 2016), at https://carnegieendowment.org/2016/03/30/u.s.-treasury-secretary-jacob-j.-lew-on-evolution-of-sanctions-and-lessons-for-future-event-5191.

76 Id.

77 Daniel McDowell, Bucking the Buck: U.S. Financial Sanctions and the International Backlash Against the Dollar (2023).

78 See, e.g., id. at 19–36.

79 See id. at 5–6.

80 Id. at 56, 84–102, 113–14.

81 See id. at 5.

82 See id. Appendix A.

83 See id. at 128.

84 Id. at 6.

85 Id.

86 Id. at 7.

87 Agathe Demarais, Backfire: How Sanctions Reshape the World Against U.S. Interests (2022).

88 Id. at xii.

89 Id. at 54–196.

90 See, e.g., id. at 119.

91 Id. at 141–42, 145.

92 Id. at 143–46.

93 Id. at 148.

94 Id. at 146–47; McDowell, supra note 77, at 134–39.

95 These are discussed in McDowell, supra note 77, at 135–39, 145–46.

96 See, e.g., Martin Mühleisen, The International Role of the Euro and the Dollar: Forever in the Lead?, Atlantic Council Geoeconomics Ctr., at 7–9 (2022), at https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/the-international-role-of-the-euro-and-the-dollar-forever-in-the-lead.

97 See, e.g., Alexandra Hofer, The EU's “Massive and Targeted” Sanctions in Response to Russian Aggression, a Contradiction in Terms, 2023 Camb. Y.B. Eur. Legal Studs. 1, 18–21.

98 Demarais, supra note 87, at 153; McDowell, supra note 77, at 7.

99 See, e.g., Mona Ali, Regime Change?: The Evolution and Weaponization of the World Dollar, Phenomenal World (Apr. 27, 2022), at https://www.phenomenalworld.org/analysis/regime-change.

100 See Katzenstein, supra note 66, at 306–12.

101 Demarais, supra note 87, at 152, 154.

102 Id. at 155; Farrell & Newman, supra note 60, at 139–40.

103 E.g., Elena Chachko & J. Benton Heath, A Watershed Moment for Sanctions? Russia, Ukraine, and the Economic Battlefield, 116 AJIL Unbound 135 (2022).

104 See, e.g., Demarais, supra note 87, at 197; McDowell, supra note 77, at xv.

105 Maximilian Hess, Economic War: Ukraine and the Global Conflict between Russia and the West 2 (2023).

106 See id.

107 Id. at 91–130.

108 See, e.g., id. at 181.

109 Christine Abely, The Russia Sanctions: The Economic Response to Russia's Invasion of Ukraine (2023).

110 See id. at 5–6.

111 Id. at 27–87.

112 Demarais, supra note 87, at 101–10.

113 Farrell & Newman, supra note 60, at 131.

114 Id. at 135.

115 Hess, supra note 105, at 50, 180.

116 See id. at 173–74 (comparing Germany with France).

117 Demarais, supra note 87, at 110–11.

118 Id. at 119.

119 Id. at 115.

120 Abely, supra note 109, at 63–65.

121 Farrell & Newman, supra note 60, at 129–37.

122 Id. at 144.

123 Id.

124 Chris Buckley, Meaghan Tobin & Siyi Zhao, Why Taiwan Was So Prepared for a Powerful Earthquake, N.Y. Times (Apr. 4, 2024).

125 Cheng Ting-Fang, Lauly Li & Ryohtaroh Satoh, Taiwan Quake Highlights Risks and Readiness of Asia's Chip Sector, Nikkei Asia (Apr. 5, 2024), at https://asia.nikkei.com/Business/Technology/Taiwan-quake-highlights-risks-and-readiness-of-Asia-s-chip-sector.

126 Kathrin Hille, TSMC: How a Taiwanese Chipmaker Became a Linchpin of the Global Economy, Fin. Times (Mar. 24, 2021), at https://www.ft.com/content/05206915-fd73-4a3a-92a5-6760ce965bd9.

127 Ting-Feng, Li & Satoh, supra note 125.

128 E.g., Rishi Iyengar, The Chipmaking World Hedges Its Taiwan Bets, For. Pol'y (Apr. 11, 2024), at https://foreignpolicy.com/2024/04/11/semiconductor-chips-taiwan-earthquake-tsmc-choke-point.

129 Christine Mui, Biden Deploys $6.6B to Boost Global Chipmaker in Key Swing State, Politico (Apr. 8, 2024), at https://www.politico.com/news/2024/04/08/biden-funding-taiwan-chipmaker-arizona-00150991.

130 Chris Miller, Chip War: The Fight for the World's Most Critical Technology (2022).

131 Id. at 331.

132 Id. at xxv.

133 Id. at 309.

134 Id. at 315

135 See especially id. at 315–17.

136 Id.

137 Farrell & Newman, supra note 60, at 102–03.

138 Id.

139 Miller, supra note 130, at 316–17.

140 See, e.g., Brian Egan, New US Semiconductor Export Controls Signify Dramatic Shift in Tech Relations with China, Just Security (Oct. 24, 2022), at https://www.justsecurity.org/83744/new-us-semiconductor-export-controls-signify-dramatic-shift-in-tech-relations-with-china.

141 E.g., Miller, supra note 130, at 319–25.

142 TSMC, About TSMC, at https://www.tsmc.com/english/aboutTSMC.

143 Miller, supra note 130, at 65.

144 See id. at 331, 341.

145 Mui, supra note 129.

146 Miller, supra note 130, at 334.

147 Aidan Powers-Riggs, Taipei Fears Washington Is Weakening Its Silicon Shield, For. Pol'y (Feb. 17, 2023), at https://foreignpolicy.com/2023/02/17/united-states-taiwan-china-semiconductors-silicon-shield-chips-act-biden.

148 Miller, supra note 130, at 335–43.

149 Cheng Ting-Fang, TSMC Founder Morris Chang Says Globalization “Almost Dead,” Nikkei Asia (Dec. 8, 2022), at https://asia.nikkei.com/Spotlight/Most-read-in-2022/TSMC-founder-Morris-Chang-says-globalization-almost-dead.

150 This is the focus of a recent and valuable symposium. See, e.g., Michael Fakhri, Situating Unilateral Coercive Measures Within a Broader Understanding of Systemic Violence, Yale J. Int'l L. Online (June 23, 2023), at https://www.yjil.yale.edu/situating-unilateral-coercive-measures-within-a-broader-understanding-of-systemic-violence; Maryam Jamshidi, Sanctions’ New Colonizers, Yale J. Int'l L. Online (June 22, 2023), at https://www.yjil.yale.edu/sanctions-new-colonizers/.

151 Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani & Ali Vaez, How Sanctions Work: Iran and the Impact of Economic Warfare (2024).

152 Id. at 8.

153 See id. at 11.

154 See id. at 1, 14–19; Joy Gordon, Invisible War: The United States and the Iraq Sanctions (2010).

155 Bajoghli, Nasr, Salehi-Isfahani & Vaez, supra note 151, at 21–25.

156 E.g., id. at 18, 77–80.

157 Id. at 48. This essay was substantially completed before the results of the 2024 presidential election in Iran.

158 Id. at 32.

159 Id. at 50–51.

160 Id.

161 Id. at 42–49.

162 Id. at 28.

163 Demarais, supra note 87, at 199–200.

164 Mulder, supra note 33, at 82–87.

165 David Cortright & George A. Lopez, The Sanctions Decade: Assessing U.N. Strategies in the 1990s (2000).

166 See generally J. Benton Heath, Economic Sanctions as Legal Ordering, Mich. Int'l L.J. (forthcoming 2025), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4531489.

167 See Woodrow Wilson, The Principles of Peace, Address at the Metropolitan Opera House, N.Y.C., Sept. 27, 1918, reprinted in 80 The Advocate of Peace 267, 268 (1918).

168 See, e.g., Mulder, supra note 33, at 133, 291–95.

169 Bajoghli, Nasr, Salehi-Isfahani & Vaez, supra note 151, at 147. On the international and domestic legal frameworks, see Elena Chachko, Virtue Sanctioning, 84 Ohio St. L.J. 1435, 1447–54 (2024).

170 McDowell, supra note 77, at 159–61.

171 Farrell & Newman, supra note 60, at 205–13.

172 Id. at 15.

173 Lim & Martínez-Mitchell, supra note 25, 368–69.

174 Id. at 391.

175 See Mulder, supra note 33, at 16–17.

176 Nathanael Tilahun & Obiora Okafor, Economic Sanctions and Humanitarian Principles: Lessons from International Humanitarian Law, Yale J. Int'l L. (June 26, 2023), at https://yjil.yale.edu/economic-sanctions-and-humanitarian-principles-lessons-from-international-humanitarian-law.

177 Id.

178 Id.

179 See, e.g., Desirée LeClercq, Rights-Based Sanctions Procedures, 75 Admin. L. Rev. 105 (2023).

180 Farrell & Newman, supra note 60, at 211.

181 Victoria Kim, Death Toll in Gaza Passes 30,000, N.Y. Times (Feb. 29, 2024), at https://www.nytimes.com/2024/02/29/world/middleeast/gaza-death-toll-war.html.

182 See, e.g., Human Rights Watch, Israel Not Complying with World Court Order in Genocide Case (Feb. 26, 2024), at https://www.hrw.org/news/2024/02/26/israel-not-complying-world-court-order-genocide-case.

183 Middle East Monitor (@MiddleEastMnt), X, at 1:51/2:19 (Mar. 20, 2024, 3:49 p.m.), at https://twitter.com/MiddleEastMnt/status/1770538209535258983.

184 See, e.g., Alison Winters, Josh Rehders & Parker Smith, Debrief with Diermeier: Principled Neutrality and Campus Activism, Vanderbilt Hustler (Mar. 22, 2024), at https://vanderbilthustler.com/2024/03/22/debrief-with-diermeier-principled-neutrality-amid-campus-activism.

185 Adam Johnson, Gaza Has Exposed Journalistic and Academic “Neutrality” as the Conservative Deflection It Always Was, In These Times (June 3, 2024), at https://inthesetimes.com/article/gaza-israel-russia-ukraine-press-journalism-pen-america.

186 See, e.g., Laura Hammond, Neutrality and Impartiality, in The Routledge Companion to Humanitarian Action 87, 93 (Roger Mac Ginty & Jenny H. Peterson eds. 2015).

187 Elise Reslinger & Joan Deas, Humanitarian Aid in Palestine: Reconsidering Neutrality Through Child Protection, Alternatives Humanitaires (Nov. 17, 2017), at https://www.alternatives-humanitaires.org/en/2017/11/17/humanitarian-aid-in-palestine-reconsidering-neutrality-through-child-protection.

188 Médecins Sans Frontières, Attacks on Humanitarian Workers in Gaza Make Vital Assistance Nearly Impossible (Feb. 27, 2024), at https://www.msf.org/attacks-humanitarian-workers-gaza-make-vital-assistance-nearly-impossible.

189 Redfield, supra note 19, at 62.

190 Mulder, supra note 33, at 2.

191 See Perry S. Bechky, Sanctions and the Blurred Boundaries of International Economic Law, 83 Mo. L. Rev. 1, 30 (2018).

192 Chachko, supra note 169, at 1439.

193 Cf. Jeena Shah, Decolonizing Sanctions: The Emancipatory Potential of Sanctions in “Boycott, Divestment, and Sanctions” (BDS) Movements, Columbia Hum. Rts. Rev. (forthcoming 2024), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4815810 (applying concepts of independence, anti-colonialism, and non-domination to draw lines between legitimate and illegitimate sanctions).